Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each Borrower and Maryland Owner represents, warrants and covenants as follows: (a) Each of Borrower and Maryland Owner will not: (i) (A) as to the Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, (B) as to the Operating Lessees, engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (D) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (E) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto; and (F) as to HH Baltimore LLC and HH Annapolis LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto; (ii) acquire or own any assets other than (A) as to the Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.4, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; (E) with respect to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, respectively, its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively; and (F) with respect to HH Baltimore LLC and HH Annapolis LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its Maryland Property; (iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate; (iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents; (v) own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.4; (vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person; (vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes; (viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet; (ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar 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 with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person; (xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement; (xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity; (xv) fail 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; provided, however, that the foregoing shall not require any member to make any additional capital contributions; (xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment for the benefit of creditors; (xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name; (xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions; (xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable; (xx) violate or cause to be violated the assumptions made with respect to Borrower and Maryland Owner and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring; (xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions; (xxii) identify itself as a department or division of any other Person; (xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement); (xxiv) fail to hold all of its assets in its own name; (xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor; (xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or (xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate. (b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), 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 or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required. (c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve
Appears in 1 contract
Sources: Mortgage Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of The purpose for which Mortgage Borrower is organized is and Maryland Owner will not:
shall be limited solely to (i) owning, holding, selling, leasing, subleasing, transferring, exchanging, operating and managing the Property, (Aii) as to entering into the Mortgage Loan Documents with Mortgage Lender, (iii) refinancing the Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance connection with a permitted repayment of the Individual Property Mortgage Loan and (iv) transacting any and all lawful business for which a Person may be organized under its constitutive law that it owns is incident, necessary and activities incidental thereto, including appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, (B) as to the Operating Lessees, engage in any business asset or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to HH Gaithersburg LLC, engage in any business or activity property other than (1i) the ownership, operation Pledged Company Interests and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (D) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (E) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto; and (F) as to HH Baltimore LLC and HH Annapolis LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or incidental personal property necessary for the ownership of such interests. Mortgage Borrower does not own and will not own any assets asset or property other than (Ai) as to the Property Owners, its Individual Property, such and (ii) incidental Personal Property as may personal property necessary and convenient for and used or to be necessary for used in connection with the ownership or operation of its Individual the Property.
(c) Mortgage Borrower will not engage in any business other than the purposes as set forth in clause (a) above. Borrower will not engage in any business other than the ownership of the Pledged Company Interests and entering into the Loan Documents with Lender, and an Operating Lessee pursuant to will conduct and in accordance with Section 7.4, (B) operate its business as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC presently conducted and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; (E) with respect to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, respectively, its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively; and (F) with respect to HH Baltimore LLC and HH Annapolis LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its Maryland Property;operated.
(iiid) merge into or consolidate with any Person, change Other than the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents;
(v) own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.4;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes;
(viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Management Agreement, neither Significant Party will enter into any contract or agreement or transaction with any general partnerAffiliate of such Significant Party, memberany constituent party of such Significant Party, shareholderany owner of such Significant Party, principal, guarantor any guarantors of the obligations of Borrower or Maryland Owner, such Significant Party or any Affiliate of any such constituent party, owner or guarantor (collectively, the foregoing"Related Parties"), except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with unaffiliated third parties;parties not so affiliated with such Significant Party or such Related Parties.
(xe) maintain its assets in such a manner that No Significant Party has incurred and will not (and Borrower agrees it will not permit Mortgage Borrower to) incur any Indebtedness other than (i) in the case of Borrower, the Debt and (ii) in the case of Mortgage Borrower, (A) the Mortgage Loan and (B) trade and operational debt incurred in the ordinary course of business with trade creditors in amounts as are normal and reasonable under the circumstances, provided in no event shall such Indebtedness on this clause (ii)(B) (1) exceed, in the aggregate, $4,000,000, (2) be costly evidenced by a note and (3) remain unpaid in excess of sixty (60) days from the date incurred (unless being contested in good faith by Mortgage Borrower). No Indebtedness other than the Mortgage Loan may be secured (senior, subordinate or difficult to segregate, ascertain or identify its individual assets from those of any other Person;pari passu) by the Property.
(xif) except with respect to each other Borrower No Significant Party has made and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) neither Significant Party will make any loans or advances to any PersonPerson and shall not acquire obligations or securities of any Related Party.
(g) Each Significant Party is and will remain solvent and each Significant Party will pay its debts and liabilities (including, except as applicable, shared personnel and overhead expenses) from their own assets as the same shall become due.
(h) Each Significant Party has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and no Significant Party will, nor will any Significant Party permit any Affiliate of such Significant Party to, amend, modify or otherwise change the organizational documents of such Significant Party in any material respect which adversely affects such Significant Party's existence as a single purpose entity or its other obligations with respect to other Borrowers under the Contribution Agreement;Loan or Mortgage Loan without the prior written consent of Lender or Mortgage Lender, as the case may be.
(xiiii) fail to pay Each Significant Party will maintain all of its books, records, financial statements and bank accounts separate from those of any taxes other Person and, except as required to or permitted under GAAP, such Significant Party's assets will not be paid under applicable law or fail to listed as assets on the financial statement of any other Person. Each Significant Party will file its own tax returns and will not file a consolidated federal income tax return with any other Person (except that such Significant Party may file or may be part of a consolidated federal tax return to the extent required or permitted by applicable law); provided, however, that there shall be an appropriate notation indicating the separate existence of such Borrower or Maryland Owner is treated Significant Party and its assets and liabilities. Each Significant Party shall maintain its books, records, resolutions and agreements as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;official records.
(xivj) fail either to Each Significant Party will be, and at all times will hold itself out to the public as as, a legal entity separate and distinct from any other Person (including any Affiliate or fail to other Related Party), shall correct any known misunderstanding regarding its status as a separate identity;entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks or clearly indicate its separate existence in any correspondence sent by it or on its behalf.
(xvk) fail to Each Significant Party will 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; .
(l) No Significant Party nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of material assets of any Significant Party.
(m) No Significant Party will commingle its assets with those of any other Person and each Significant Party will hold all of its assets in its own name;
(n) No Significant Party will guarantee or become obligated for the debts of any other Person and each Significant Party does not and will not hold itself out as being responsible for the debts or obligations of any other Person.
(o) Each Significant Party shall be a single-member limited liability company organized under the laws of the State of Delaware.
(p) Each Significant Party shall at all times cause there to be at least two duly appointed Independent Managers of such Significant Party (provided, however, that the foregoing shall not require any member to make any additional capital contributions;no Person may serve as an Independent Manager of both Borrower and Mortgage Borrower).
(xviq) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, Each Significant Party shall allocate fairly and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any)reasonably any overhead expenses that are shared with an Affiliate, including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment paying for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an any employee of an Affiliate) among the Persons sharing such expenses Affiliate or to use separate stationery, invoices and checks bearing its own name;Related Party.
(xviiir) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from No Significant Party shall pledge its assets as for the same shall become due, provided, however, that the foregoing shall not require benefit of any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made Person other than with respect to Borrower (i) in the case of Borrower, the Loan and Maryland Owner and its principals (ii) in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;case of Mortgage Borrower, the Mortgage Loan.
(xxis) fail to pay the salaries of its own employees, if any, or Each Significant Party shall maintain a sufficient number of employees in light of its contemplated business operationsoperations or retain the services of agents or consultants therefor and pay the salaries of such employees, provided, however, that the foregoing shall not require any member to make any additional capital contributions;agents or consultants from its own funds.
(xxiit) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to Borrower shall conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as so that the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), as if such representation, warranty or covenant was assumptions made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to Borrower in the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity Nonconsolidation Opinion shall be requiredtrue and correct in all material respects.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Prime Group Realty Trust)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each ), Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of Borrower has not and will not, and will not permit any Other Senior Mezzanine Borrower, Mortgage Loan Borrower or Maryland Owner will notto:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to Mezzanine 2 Borrower, engage in any business or activity other than the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto; (E) as to Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (F) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (DG) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (EH) as to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively, and activities incidental thereto; and (FI) as to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.47.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; , (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; , (E) with respect to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, respectively, its limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis LLC Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively; and , (F) with respect to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; (H) as to Mezzanine 2 Borrower, other than (1) the Mezzanine 2 Pledged Company Interests or the Mezzanine 2 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral; and (I) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.47.4 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, (C) with respect to Mezzanine 2 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 2 Pledged Company Interesst and the Mezzanine 2 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 2 Loan Agreement, or (D) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes;
(viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar 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 with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail 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; provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower and Maryland Owner and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), 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 or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each ), Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of Borrower has not and will not, and will not permit any Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner will notto:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (E) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (DF) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (EG) as to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively, and activities incidental thereto; and (FH) as to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.47.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; , (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; , (E) with respect to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, respectively, its limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis LLC Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively; and , (F) with respect to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property;, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; and (H) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral.
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.47.4 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, or (C) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) (x) with respect to Borrower, incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than the Debt, (y) with respect to Mezzanine 1 Borrower, incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than the “Debt” (as defined in the Mezzanine 1 Loan Agreement) or (z) with respect to Mortgage Loan Borrower (other than Maryland Owner), incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the DebtDebt (as defined in the ▇▇▇▇▇ Fargo Mortgage Loan Agreement), (B) with respect to the Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in clauses (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note Note, the Other Mezzanine Notes and Mezzanine Notesthe Mortgage Note;
(viii) fail to maintain its own separate books and records records, and bank accounts; except that each Borrower’s, Mezzanine 1 Borrower’s, Mortgage Loan Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower and/or or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers, Maryland Owner, Owner or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar 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 with respect to each other Borrower Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers and Maryland Owner under the Loan Documents, the Mezzanine 1 Loan Documents, the Mortgage Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail 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; , provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official official, or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower and Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers or Maryland Owner and its their respective principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the RestructuringLoan;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland OwnerBorrower, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland OwnerBorrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), 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 or Maryland Owner, as applicableBorrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicableBorrower; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland OwnerBorrower, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuringclosing, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eveIndepend
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each ), Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of Borrower has not and will not, and will not permit any Senior Mezzanine Borrower, Mortgage Loan Borrower or Maryland Owner will notto:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to the Mezzanine 3 Borrower, engage in any business or activity other than the ownership of the Mezzanine 3 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto (E) as to the Mezzanine 2 Borrower, engage in any business or activity other than the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto; (F) as to the Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (G) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (DH) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (EI) as to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively, and activities incidental thereto; and (FJ) as to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.47.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; , (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; , (E) with respect to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, respectively, its limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis LLC Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively; and , (F) with respect to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; (H) as to Mezzanine 3 Borrower, other than (1) the Mezzanine 3 Pledged Company Interests or the Mezzanine 3 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 3 Pledged Company Interests and the Mezzanine 3 Collateral; (I) as to Mezzanine 2 Borrower, other than (1) the Mezzanine 2 Pledged Company Interests or the Mezzanine 2 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral; and (J) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectivelyor pursuant to in accordance with Section 7.6 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, (C) with respect to Mezzanine 3 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 3 Pledged Company Interest and the Mezzanine 3 Collateral or, pursuant to and in accordance with Section 7.47.6 of the Mezzanine 3 Loan Agreement, (D) with respect to Mezzanine 2 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 2 Pledged Company Interest and the Mezzanine 2 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 2 Loan Agreement, or (E) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interest and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes;
(viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar 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 with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail 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; provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower and Maryland Owner and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), 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 or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release) each ), Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of Borrower has not and will not, and will not permit any Mortgage Loan Borrower or Maryland Owner will notto:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4, 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (DE) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (EF) as to HH Baltimore Holdings Annapolis Holding LLC and HH Annapolis Holding Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, respectively, and activities incidental thereto; and (FG) as to HH Baltimore Annapolis LLC and HH Annapolis Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.47.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing; , (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents; (E) with respect to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, respectively, its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively; and (F) with respect to HH Baltimore LLC and HH Annapolis LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its Maryland Property;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, 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 fail to comply with the provisions of its organizational documents;
(v) own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.4;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes;
(viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar 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 with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail 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; provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower and Maryland Owner and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), 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 or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner 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 Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve,
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt (I) Each Borrower (other than a Recycled SPE Borrower/SPE Component Entity), each SPE Component Entity, Additional Obligor and each Pledgor has been paid in full not since its formation, (and regardless of any Property ReleaseII) each Borrower Recycled SPE Borrower/SPE Component Entity has complied with clauses (i)(A), (ii)(A) and Maryland Owner represents(vii) below since its formation and (III) each Borrower, warrants each SPE Component Entity, Additional Obligor and covenants as follows:
(a) Each of Borrower and Maryland Owner each Pledgor will not, except as may be provided for in this Agreement or as set forth in Section 5.5:
(i) (A) as with respect to Borrower, except with respect to the Property OwnersPreviously-Owned Properties, engage in any business or activity other than the ownership, operation (including operation, management, leasing such Individual Property pursuant to an Operating Lease) and maintenance of the applicable Individual Property that it owns Property, and activities related or incidental thereto, including and refinancing the Properties in connection with a repayment of the Loan or any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.4subsequent or other Loan, (B) as with respect to Pledgor, own its interest in the Operating Lessees, Collateral and engage in any business activities related or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; , (C) with respect to SPE Component Entity, act as to HH Gaithersburg LLC, engage in any business a general partner of the limited partnership that owns the related Individual Property or activity other than (1) the ownership, operation and maintenance as member of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) that owns the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland related Individual Property and (3) activities incidental thereto; transact lawful business that is incident, necessary and appropriate to accomplish the foregoing and (D) with respect to Additional Obligor, act as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations the account holder under the Loan Documents; (E) as to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, engage in any business or activity other than Cash Management Account for the ownership and operation benefit of the limited liability company interests in HH Baltimore LLC and HH Annapolis LLC, respectively, and activities incidental thereto; and (F) as to HH Baltimore LLC and HH Annapolis LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental theretoeach Borrower;
(ii) (A) with respect to Borrower, except with respect to the Previously-Owned Properties, acquire or own any assets other than (Ax) as to the Property Owners, its applicable Individual Property, and (y) such incidental Personal Property as may be necessary for the ownership or ownership, leasing, maintenance and operation of its such applicable Individual Property, Property and an Operating Lessee pursuant to and in accordance with Section 7.4activities related or incidental thereof, (B) as with respect to Operating LesseePledgor, such own its interest in the Collateral and engage in activities related or incidental Personal Property as may be necessary for the operation of the Individual Property that it leasesthereto, (C) with respect to HH Gaithersburg LLCSPE Component Entity and Pledgor, its respective Maryland Property, its own the limited partnership or limited liability company interests in HH Gaithersburg the related Borrower LLC and personal property necessary or incidental to its ownership of such incidental Personal Property as may be necessary for the ownership interests and operation of the foregoing; (D) with respect to HH Gaithersburg Borrower LLCAdditional Obligor, incidental Personal Property act as may be necessary for it to perform its obligations the account holder under the Loan Documents; (E) with respect to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, respectively, its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC and such incidental Personal Property as may be necessary Cash Management Account for the ownership and operation benefit of HH Baltimore LLC and HH Annapolis LLC, respectively; and (F) with respect to HH Baltimore LLC and HH Annapolis LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its Maryland Propertyeach Borrower;
(iii) merge into or consolidate with any Person, change the legal structureor dissolve, terminate, liquidate in whole or sell in part, transfer (other than with respect to any transfer permitted pursuant to Section 6.3(iii) hereof) or otherwise dispose of all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of change its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidatelegal structure;
(iv) fail to observe all applicable organizational formalities, 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 documentsdocuments (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, Lender’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed 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, with respect to any SPE Component Entity or Pledgor (as to HH Annapolis Holding LLCapplicable), HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.4the applicable Borrower);
(vi) except with respect to each other Borrower under the Loan Documents, commingle its funds or assets with the funds or assets of any other PersonPerson (other than another Person comprising Borrower hereunder);
(vii) other than as permitted by this Agreement, and except with respect to debt that has been paid in full prior to the date of this Agreement, incur any debtIndebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than than, with respect to Borrower (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and 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 ninety (6090) days past the date incurred and paid on or prior to such date, and/or (C) Permitted Equipment Leases, (D) financing leases and purchase money indebtedness incurred in obligations pursuant to the ordinary course of business relating to Personal Property on commercially reasonable terms and conditionsGround Leases, (E) equipment financing that is not secured by a Lien on obligations pursuant to the Previously-Owned Property other than on the equipment being financed, and/or Sale Agreements; (F) real estate taxes not yet delinquent, (G) Capital Expenditures spent and completed in connection accordance with the Contribution Agreementthis Agreement and paid when due, and (H) tenant allowances and tenant improvements incurred pursuant to Leases entered into in accordance with this Agreement and paid when due; provided however, that the aggregate amount of the indebtedness described in (C), (DB) and (EC) shall not exceed at any time (I) with respect to any individual Continental Borrower, three percent (3%) of the outstanding aggregate Allocated Loan Amounts associated with the Individual Continental Property owned by such Continental Borrower, and (II) with respect to all of the Borrowers, in the aggregate, three percent (3%) of the outstanding principal amount of the Note and Mezzanine NotesLoan. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) by the Property or Collateral;
(viii) fail to maintain all of its own separate books and records books, records, financial statements and bank accounts; accounts separate from those of any other Person (including, without limitation, any Affiliates), except that each Borrower’s, Pledgor’s, Additional Obligor’s or SPE Component Entity’s assets and Maryland Owner’s financial position, assets, liabilities, net worth and operating results liabilities may be included in the a consolidated financial statements statement of an Affiliate, provided that its Affiliates so long as appropriate notation is made on such consolidated financial statements contain a footnote indicating to indicate the separateness of Borrower, Pledgor, Additional Obligor or SPE Component Entity from such Affiliates and to indicate that such Borrower and/or Maryland OwnerBorrower’s, as the case may bePledgor, is a separate legal entity and its Additional Obligor or SPE Component Entity’s assets and credit are not available to satisfy the debt debts and other obligations of such Affiliate Affiliates or any other Person. Borrower’s, Pledgor’s, Additional Obligor’s or SPE Component Entity’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s, Pledgor’s, Additional Obligor’s or SPE Component Entity’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, Pledgor, Additional Obligor or SPE Component Entity and such Affiliates and to indicate that Borrower’s, Pledgor’s, Additional Obligor’s or SPE Component Entity’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 also be listed on its Borrower’s, Pledgor’s, Additional Obligor’s or SPE Component Entity’s own separate balance sheet. Borrower, Pledgor, Additional Obligor or SPE Component Entity has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principalprincipal or Affiliate including the Management Agreement, guarantor except, in each case in the ordinary course of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except business and upon terms and conditions that are intrinsically fair, commercially reasonable fair and substantially similar 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, except for the other Persons comprising Borrower hereunder;
(xi) except with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure for the obligations benefit of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person, except in each case for the other Persons comprising Borrower, Additional Obligor or Pledgor hereunder in connection with this Agreement and the other Loan Documents;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax Tax returns separate from those of any other Person (unless prohibited by applicable Legal Requirements from doing so or except to the extent such Borrower Borrower, SPE Component Entity, Additional Obligor or Maryland Owner Pledgor is treated as a “disregarded entity” for tax purposes and is not required to file tax such Tax returns under applicable Legal Requirements);
(xiv) fail either 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 fail to part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets solely in its own name (or the name of other Persons comprising Borrower hereunder) or (D) correct any known misunderstanding regarding its separate identity;
(xv) fail 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; operations (to the extent there exists sufficient cash flow from the applicable Individual Property to do so), provided, however, that the foregoing no Person shall not require any member be required to make any additional direct or indirect capital contributionscontributions to Borrower, Pledgor, Additional Obligor or SPE Component Entity in order to comply with the foregoing;
(xvi) if it is a partnership or limited liability company, without the prior unanimous written consent of all of its partners partners, shareholders or members, as applicable, and the prior unanimous written consent of one hundred percent its board of directors or managers, as applicable, and the prior written consent of each Independent Director (100%) regardless of whether such Independent Director is engaged at the managers Borrower, Pledgor, Additional Obligor or directors of such Borrower or Maryland Owner or each SPE Component Entity (if anylevel), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Creditors Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or official, (c) take any action with the intent to cause such entity to become insolvent, (d) make an assignment for the benefit of creditorscreditors or (e) take any Material Action with respect to Borrower, Pledgor, Additional Obligor or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower, Pledgor or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower, Pledgor, Additional Obligor or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, there are at least two (2) Independent Directors then serving in such capacity in accordance with the terms of the applicable organizational documents and each of such Independent Directors have consented to such foregoing action);
(xvii) fail to allocate shared expenses (including including, without limitation, shared office space and services performed by an employee of an Affiliatespace) among the Persons sharing such expenses or fail to use separate stationery, invoices and checks bearing its own name; provided, however, that it is acknowledged and agreed that the Accounts and the Borrower’s operating account may be opened in the name of one Borrower (on behalf of the other Borrowers) or Additional Obligor (with respect to the Cash Management Account) and that it shall not be a breach of this Agreement if checks on behalf of any Borrower entity are issued by the name of the account-holding Borrower entity or, with respect to the Cash Management Account, the Additional Obligor;
(xviii) fail to remain solvent, and continue pay (or cause to pay be paid) its debts and own liabilities (including, as applicablewithout limitation, shared personnel and overhead expensessalaries of its own employees) from its assets as own funds or fail to maintain a sufficient number of employees (if any) in light of its contemplated business operations (in each case to the same shall become dueextent there exists sufficient cash flow from the applicable Individual Property to do so), provided, however, that the foregoing no Person shall not require any member be required to make any direct or indirect additional capital contributionscontributions to Borrower in order to comply with the foregoing;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliatesAffiliates, as applicable;
(xx) identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it; or
(xxi) violate or cause to be violated the assumptions made with respect to Borrower Borrower, Pledgor, Additional Obligor and Maryland Owner and its principals each SPE Component Entity in the Non-Consolidation Opinion or in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an AffiliateNew Non-Consolidation Opinion.
(b) If Borrower Borrower, Additional Obligor or Maryland Owner Pledgor is a partnership or limited liability companycompany (other than an Acceptable LLC), each general partner (in the case of a limited partnership, ) or the managing at least one member (in the case of a limited liability company company) of Borrower, Additional Obligor or Pledgor, as applicable, shall be a corporation or an Acceptable LLC (each each, an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower Borrower, Additional Obligor or Maryland OwnerPledgor, as applicable. Each SPE Component Entity Entity, Additional Obligor and Pledgor (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii5.1(a)(iii) - – (vi) (inclusive) and (viii) - – (xxvii)xxi) (inclusive) and, if such SPE Component Entity, Additional Obligor or Pledgor 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, Additional Obligor or Pledgor, as applicable; (ii) will not engage in any business or activity other than owning an interest in Borrower or Maryland Owner, as applicableBorrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicableBorrower; (iv) will at all times continue to own no less than a 0.5% direct equity ownership interest in Borrower; (v) other than as permitted by this Agreement, will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vvi) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required5.1.
(c) In the event Borrower and/or Maryland Owner Borrower, Pledgor, Additional Obligor or any SPE Component Entity is a single member Delaware limited liability companyan Acceptable LLC, the limited liability company agreement of Borrower and/or Maryland Owner Borrower, Pledgor, Additional Obligor or such SPE Component Entity (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole last remaining member of Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner such SPE Component Entity (as applicable) (“Member”) to cease to be the member of Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner such SPE Component Entity (as applicable) (other than upon the continuation of such Borrower, Pledgor, Additional Obligor or SPE Component Entity without dissolution upon (A) upon an assignment by Member of all of its limited liability company interest in Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner 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 Borrower, Pledgor, Additional Obligor or Maryland Owner 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 Borrower, Pledgor, Additional Obligor or Maryland Owner 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 Borrower, Pledgor, Additional Obligor or Maryland Owner, such SPE Component Entity (as applicable) automatically be admitted to Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner such SPE Component Entity (as applicable) as a member with a 0% economic interest (“Special Member”) and shall continue Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner, such SPE Component Entity (as applicable, ) without dissolution and (ii) Special Member may not resign from Borrower Borrower, Pledgor, Additional Obligor or Maryland Owner such SPE Component Entity (as applicable) or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower Borrower, Pledgor, Additional Obligor or such SPE Component Entity (as applicable) as a Special Member in accordance with requirements of Delaware law and (B) after giving effect to such successor Special Member has also accepted its appointment as an resignation or transfer, there remains at least Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member Directors of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in such Borrower, (iv) Special MemberPledgor, in its capacity as Special Member, may not bind Borrower 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, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, 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 of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eveAdditiona
Appears in 1 contract
Sources: Loan Agreement (DDR Corp)