Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full: (a) Borrower does not own and will not own any asset or property other than (i) the Individual Properties, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual Properties. (b) Borrower will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower and Borrower will conduct and operate its business as presently conducted and operated. (c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party. (d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at the Individual Properties; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual Properties. (e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates. (f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due. (g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent. (h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records. (i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate 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. (j) Borrower 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. (k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower. (l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name. (m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person. (n) Borrower will not guarantee, or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person. (i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. (ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member. (p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. (q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director. (r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party. (s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement. (t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations. (u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Sources: Loan Agreement (Wells Real Estate Investment Trust Inc)
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt Obligations shall be paid and performed in full:
(a) Such Borrower does not own and will not own any asset or property other than (i) the applicable Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the such Individual PropertiesProperty.
(b) Such Borrower has not engaged and will not engage in any business other than the ownership, management and operation of the applicable Individual Properties, entering into the Loan as a co-borrower Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Such Borrower has not and will not enter into any contract or agreement with any Affiliate of any Borrower, any constituent party of any Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Such Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, and (ii) unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount not exceeding five percent (iii5.0%) Indebtedness incurred in of the financing original principal amount of equipment and other personal property used the portion of the Loan relating to the applicable Individual Property at the Individual Propertiesany one time; provided that any Indebtedness incurred pursuant to subclauses subclause (ii) and (iii) shall be (xA) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) abovepast due, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (zB) incurred in the ordinary course of businessbusiness (the Indebtedness described in the foregoing 108 clauses (i) and (ii) is referred to herein, collectively, as "PERMITTED INDEBTEDNESS"). No Indebtedness other than the Debt may be secured (subordinate or pari passuPARI PASSU) by any of the Individual PropertiesProperty.
(e) Such Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.
(f) Such Borrower is and will remain solvent and such Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Such Borrower has done or caused to be done done, and will do do, all things necessary to observe organizational formalities and preserve its existence, and such Borrower will notnot (i) terminate or fail to comply with the provisions of its organizational documents, nor will Borrower permit any constituent party to or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loan, the applicable Rating Agencies have issued a Rating Agency Confirmation, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, its operating agreement, trust agreement or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consentdocuments.
(h) Such Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts accounts, including, without limitation, the applicable Clearing Account, separate from those of its Affiliates and any constituent partyother Person, including without limitation, any other Borrower. Such Borrower’s 's assets will not be listed as assets on the financial statement of any other Person; , provided, however, that such Borrower’s '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 (or the notes thereto) thereto to indicate the separateness of such Borrower and such Affiliates and to indicate that such Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person Person, and (ii) such assets shall be listed on such Borrower’s 's own separate balance sheet. Such Borrower will file its own tax returns (to the extent such Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Person, unless required by any Legal Requirements, tax code or GAAP. Such Borrower is a disregarded entity for federal income tax purposes. Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Such Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of such Borrower or any constituent party of such Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(j) Such Borrower has maintained and 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.. 109
(k) Neither such Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidationconsolidation, consolidation asset sale or merger, in whole or in part, of Borrower.
(l) Such Borrower has not and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and has held and will hold all of its assets in its own name.
(m) Such Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person, except as provided herein and in any other Loan Documents.
(n) Such Borrower has not and will not guarantee, assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(io) If The organizational documents of Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a corporation board of one or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower more directors designated by Sole Equity Member, and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower there shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of individuals on the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”"INDEPENDENT DIRECTOR") and which of such Borrower who are reasonably satisfactory to Lender and who shall not have been at the time of such individual’s 's appointment or at any time (except pursuant to an express provision in such Borrower's operating agreement providing for the appointment of such Independent Director to become a "special member" upon Sole Equity Member ceasing to be a member of such Borrower) while serving as a director of such SPC Party and Borroweran Independent Director, and may not have been at any time during the preceding five (5) years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC PartyBorrower, any Affiliate of such Borrower or any Affiliate direct or indirect parent of either of themsuch Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director)such Borrower, (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “"control” " means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a such Person, whether through ownership of voting securities, by contract or otherwise.
(qp) The organizational documents of such Borrower shall not cause or permit provide that the board of directors of any SPC Party and such Borrower to shall not take any action which, under the terms of any certificate of incorporationformation, by-laws limited liability company operating agreement or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Partyagreement, requires a an unanimous vote of the board of directors of each SPC Party and such Borrower unless at the time of such action there shall be at least two (2) members of the board of directors who are each Independent Directors (and such Independent Directors have participated in such vote). Such Borrower will not without the unanimous written consent of its board of directors including the Independent Directors (i) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or consent to the 110 appointment of a receiver, liquidator or any similar official, (iii) take any action that might cause such entity to become insolvent, or (iv) make an assignment for the benefit of creditors.
(q) The organizational documents of such Borrower shall provide that, as long as any portion of the Obligations remains outstanding, upon the occurrence of any event that causes Sole Equity Member to cease to be a member of such Borrower (other than (i) upon an assignment by Sole Equity Member of all of its limited liability company interest in such Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of such Borrower and the Loan Documents, or (ii) the resignation of Sole Equity Member and the admission of an additional member of such Borrower, if permitted pursuant to the organizational documents of such Borrower and the Loan Documents), one of the persons acting as an Independent Director of such Borrower shall, without any action of any Person and simultaneously with Sole Equity Member ceasing to be a member of such Borrower, automatically be admitted as the Sole Equity Member of such Borrower (the "SPECIAL MEMBER") and shall preserve and continue the existence of such Borrower without dissolution. The organizational documents of such Borrower shall further provide that for so long as any portion of the Obligations is outstanding, no Special Member may resign or transfer its rights as Special Member unless (i) a successor Special Member has been admitted to such Borrower as a Special Member, and (ii) such successor Special Member has also accepted its appointment as an Independent Director.
(r) The organizational documents of such Borrower shall provide that, as long as any portion of the Obligations remains outstanding, except as expressly permitted pursuant to the terms of this Agreement, (i) Sole Equity Member may not resign, and (ii) no additional member shall be admitted to such Borrower.
(s) The organizational documents of such Borrower shall provide that, as long as any portion of the Obligations remains outstanding: (i) such Borrower shall be dissolved, and its affairs shall be wound up, only upon the first to occur of the following: (A) the termination of the legal existence of the last remaining member of such Borrower or the occurrence of any other event which terminates the continued membership of the last remaining member of such Borrower in such Borrower unless the business of such Borrower is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the "ACT"), or (B) the entry of a decree of judicial dissolution under Section 18-802 of the Act; (ii) upon the occurrence of any event that causes the last remaining member of such Borrower to cease to be a member of such Borrower or that causes Sole Equity Member to cease to be a member of such Borrower (other than (A) upon an assignment by Sole Equity Member of all of its limited liability company interest in such Borrower and the admission of the transferee, if permitted pursuant to the organizational documents of such Borrower and the Loan Documents, or (B) the resignation of Sole Equity Member and the admission of an additional member of such Borrower, if permitted pursuant to the organizational documents of such Borrower and the Loan Documents), to the fullest extent permitted by law, the personal representative of such last remaining member shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in such Borrower, agree in writing (I) to continue the existence of such Borrower, and (II) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such Borrower, effective as of the occurrence of the event that terminated the continued membership of such member in such Borrower; (iii) the bankruptcy of Sole Equity Member or a Special Member shall not cause such Sole Equity Member or Special Member, respectively, to cease to be a member of such Borrower and upon the occurrence of such an event, the business of such Borrower shall continue without dissolution; (iv) in the event of the dissolution of such Borrower, such Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of such Borrower in an orderly manner), and the assets of such Borrower shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and (v) to the fullest extent permitted by law, each of Sole Equity Member and the Special Members shall irrevocably waive any right or power that they might have to cause such Borrower or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of such Borrower, to compel any sale of all or any portion of the assets of such Borrower pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of such Borrower.
(t) Such Borrower shall conduct its business so that the assumptions made with respect to such Borrower in the Non-Consolidation Insolvency Opinion shall be true and correct in all respects. In connection with the foregoing, such Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the such Borrower or any other Person) set forth in the Non-Consolidation Insolvency Opinion, (ii) all of the representations, warranties and covenants in this Section SECTION 3.1.24, and (iii) all of the organizational documents of the Borrower and any SPC Partysuch Borrower.
(su) Such Borrower will not permit any Affiliate or constituent party (other than Manager) independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreementaccounts.
(tv) Such Borrower has paid and shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(uw) Such Borrower has compensated and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
(x) Such Borrower has not, and without the unanimous consent of all of its directors or members (including all Independent Directors), as applicable, will not (i) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally, (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or for all or any portion of such Borrower's properties, (iii) make any assignment for the benefit of such Borrower's creditors, or (iv) take any action that might cause Borrower to become insolvent.
(y) Such Borrower has maintained and will maintain an arm's-length relationship with its Affiliates.
(z) Such Borrower has allocated and will allocate fairly and reasonably shared expenses, including shared office space.
(aa) Except in connection with the Loan, such Borrower has not pledged and will not pledge its assets for the benefit of any other Person.
(bb) Such Borrower has and will have no obligation to indemnify its officers, directors, members or Special Members, as the case may be, or has such an obligation that is fully subordinated to the Debt and will not constitute a claim against it if cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation.
(cc) Borrower and the Independent Directors will consider the interests of Borrower's creditors in connection with all limited liability company actions.
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(b) Borrower has not conducted any business other than in connection with this Agreement and will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent Four Million and No/100 Dollars (3%$4,000,000.00) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesProperty.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s 's consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s 's assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s '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 (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s 's own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposesPerson. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have make its credit assets available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “"SPC Party”), as applicable, ") shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the (or two special managers if Borrower is a limited liability company) who are provided by a nationally nationally-recognized company that provides professional independent directors (each, an “"Independent Director”") of each SPC Party and which are Borrower reasonably satisfactory to Lender who shall not have been at the time of such individual’s 's appointment or at any time while serving as a director or manager of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director)them, (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “"special purpose entity” " affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, an Independent Director of a "special purpose entity" affiliated with the Borrower (other than any entity that owns a direct or indirect equity interest in the Borrower) if such individual is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “"control” " means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors or managers of each SPC Party and Borrower unless at the time of such action there shall be at least two board members or managers who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Insolvency Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Insolvency Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with except as required for the terms conduct of its respective Management AgreementBorrower's business.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Fee Borrower does and Leasehold Borrower do not own and will not own any asset or property other than (i) their respective interests in the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent Four Million and No/100 Dollars (3%$4,000,000.00) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesProperty.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Fee Borrower is and Leasehold Borrower are and will remain solvent and Fee Borrower and Leasehold Borrower will pay its their respective debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s 's consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s 's assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s '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 (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s 's own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposesPerson. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have make its credit assets available to satisfy the debts or obligations of any other Person.
(i) If either of Fee Borrower or Leasehold Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “"SPC Party”), as applicable, ") shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Fee Borrower or Leasehold Borrower, as applicable, and each such SPC Party will at all times comply, and will cause Fee Borrower or Leasehold Borrower, as applicable, to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Fee Borrower or Leasehold Borrower, as applicable, Fee Borrower or Leasehold Borrower, as applicable, shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If either of Fee Borrower or any SPC Party of Leasehold Borrower is a single member limited liability company, Fee Borrower or such SPC Party Leasehold Borrower, as applicable, shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Fee Borrower or such SPC PartyLeasehold Borrower, as applicable, shall immediately become the sole member of Fee Borrower or such SPC PartyLeasehold Borrower, as applicable, and the other of which shall become the sole member of Fee Borrower or such SPC Party Leasehold Borrower, as applicable, if the first such springing member no longer is available to serve as such sole member.
(p) Fee Borrower and Leasehold Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the (or two special managers if Fee Borrower or Leasehold Borrower is a limited liability company) who are provided by a nationally nationally-recognized company that provides professional independent directors (each, an “"Independent Director”") of each SPC Party, Fee Borrower and which are Leasehold Borrower reasonably satisfactory to Lender who shall not have been at the time of such individual’s 's appointment or at any time while serving as a director or manager of such SPC Party Party, Fee Borrower and Leasehold Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Fee Borrower, Leasehold Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Fee Borrower, Leasehold Borrower or any Affiliate of either of them (other than as an Independent Director)them, (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “"special purpose entity” " affiliated with the Fee Borrower or Leasehold Borrower that does not own a direct or indirect equity interest in the either Fee Borrower or Leasehold Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, an Independent Director of a "special purpose entity" affiliated with either Fee Borrower or Leasehold Borrower (other than any entity that owns a direct or indirect equity interest in either Fee Borrower or Leasehold Borrower) if such individual is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “"control” " means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Party, Fee Borrower or Leasehold Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Fee Borrower, Leasehold Borrower or SPC Party, requires a unanimous vote of the board of directors or managers of each SPC Party Party, Fee Borrower and Leasehold Borrower unless at the time of such action there shall be at least two board members or managers who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Insolvency Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Insolvency Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with except as required for the terms conduct of its respective Management AgreementBorrower's business.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrower, that as of the date hereof and until such time as the Debt Obligations shall be paid and performed in full:
(a) Borrower does not own and None of Borrowers owns or will not own any asset or property other than (i) the Individual Properties, its respective Property and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual Propertiessuch Property.
(b) Borrower None of Borrowers has engaged or will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower its respective Property and Borrower each of Borrowers will conduct and operate its business as presently conducted and operated.
(c) Borrower has not entered and will not enter into any contract or agreement with any Affiliate of any Borrower, any constituent party of any Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Such Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and (iii) Indebtedness incurred in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the financing of equipment and other personal property used aggregate at the Individual Propertiesany one time; provided that any Indebtedness incurred pursuant to subclauses subclause (ii) and (iii) shall be (xA) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid outstanding not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) abovedays, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (zB) incurred in the ordinary course of businessbusiness (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as "Permitted Indebtedness"). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual Properties. Notwithstanding the foregoing, so long as no Event of Default shall have occurred and remain uncured under this Agreement, Borrowers shall be allowed to borrow Permitted Mezzanine Debt subsequent to the Closing Date; provided that, prior to consummating any such proposed Permitted Mezzanine Debt, (i) Borrowers shall provide written notice to Lender of any proposed Permitted Mezzanine Debt financing, including a summary of the material terms and conditions thereof, (ii) if the Loan has not been securitized, Borrowers shall obtain Lender's prior written consent, which shall not be unreasonably withheld or delayed, and if the Loan has been securitized, Borrowers shall obtain a "No Downgrade" letter from the Rating Agencies, (iii) the holder of such Permitted Mezzanine Debt shall enter into an intercreditor agreement with Lender, reasonably satisfactory to Lender in form and substance, and (iv) Borrowers shall provide Lender with true and complete copies of all loan documents entered into in connection with any such Permitted Mezzanine Debt. Nothing contained in this Agreement of the other Loan Documents shall be deemed to prohibit any indirect owner of any Borrower from incurring indebtedness; provided that any such indebtedness is not secured by any direct interest in any of the Properties or any Borrower.
(e) Such Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.
(f) Such Borrower is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Such Borrower has done or caused to be done done, and will do do, all things necessary to observe organizational formalities and preserve its existence, and such Borrower will notnot (i) terminate or fail to comply with the provisions of its organizational documents, nor will Borrower permit any constituent party to or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loan, the applicable Rating Agencies have issued a Rating Agency Confirmation, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, its operating agreement, trust agreement or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner material respect, provided that (i) violates the single purpose covenants set forth any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot Agreement shall be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consentdeemed material.
(h) Such Borrower will maintain all of its separate books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent partyother Person. Such Borrower’s 's assets will not be listed as assets on the financial statement of any other Person; , provided, however, that such Borrower’s '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 (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Such Borrower will file its own tax returns (to the extent such Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent unless permitted or required by applicable law or requirement. Such Borrower is a disregarded entity for federal income tax purposes. Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Such Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of such Borrower or any constituent party of such Borrower), shall correct any known misunderstanding regarding its status as a separate 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.
(j) Such Borrower will has maintained and intends 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.
(k) Neither such Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidationconsolidation, consolidation asset sale or merger, in whole or in part, of such Borrower.
(l) Except as contemplated by this Agreement, wherein Borrowers are jointly and severally liable, and further, pursuant to the Clearing Account Agreement, such Borrower has not and will not commingle the funds and other assets of such Borrower with those of any Affiliate or constituent party or any other Person, and has held and will hold all of its assets in its own name.
(m) Such Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as contemplated by this Agreement, such Borrower has not and will not guarantee, assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(io) If The organizational documents of such Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a corporation board of one or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower more directors or managers designated by Sole Member, and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower there shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of individuals on the board of directors of each SPC Party and the or managers against Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “"Independent Director”") and which are reasonably satisfactory to Lender of such Borrower who shall not have been at the time of such individual’s 's appointment or at any time (except pursuant to an express provision in such Borrower's operating agreement providing for the appointment of such Independent Director to become a "special member" upon Sole Member ceasing to be a member of such Borrower) while serving as a director of such SPC Party and Borroweran Independent Director, and may not have been at any time during the preceding five (5) years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC PartyBorrower, any Affiliate of such Borrower or any Affiliate direct or indirect parent of either such Borrower, except to the extent such Independent Director serves in such capacity in respect of themany other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director)such Borrower, (iii) a Person or other entity controlling Controlling or under common control Control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Borrower hereby represents has been formed for the sole purpose of owning and warrants to, operating the Collateral Asset. From and covenants with, Lender that as of after the date hereof and until such time as the Debt Loan shall be paid in full:
(ai) Borrower does has not own and will not own any asset or property other than (i) the Individual PropertiesCollateral Asset, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesCollateral Asset.
(bii) Borrower has not and will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower Collateral Asset and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party.
(diii) Borrower has not incurred and will not incur any Indebtedness indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation) other than (iX) the DebtLoan, (iiY) unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount not exceeding $100,000 at any one time, and (iiiZ) Indebtedness indebtedness incurred in the financing of equipment and other personal property used at on the Individual Properties; Collateral Asset with annual payments not exceeding $100,000 in the aggregate, provided that any Indebtedness indebtedness incurred pursuant to subclauses (iiY) and (iiiZ) shall be (x1) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts past due and payable in accordance with the provisions of this Agreement and (z2) incurred in the ordinary course of business. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate subordinate, pari passu or pari passuotherwise) by any of the Individual PropertiesCollateral Asset.
(eiv) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with third parties other than any such party and upon terms acceptable to Lender in its sole discretion.
(v) Borrower shall not acquire obligations or securities of its Affiliates.
(fvi) As of the date hereof, Borrower is and will remain solvent and Borrower will is able to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gvii) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will notneither party will, nor will Borrower it permit any constituent party to to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylawsformation, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent6.14).
(hviii) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Except for Guarantor, Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.
(iix) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrowerparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks bearing its own name.
(jx) Borrower will maintain maintains adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.
(kxi) Neither Borrower Borrower, nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower, or transfer or otherwise dispose of all or substantially all of its assets.
(lxii) Borrower will not commingle the its funds and other assets of Borrower with those of any Affiliate or constituent party or any other PersonPerson (provided, however, property manager of the Collateral Asset may do so), and will hold all of its assets in its own name, other than as permitted under the Loan Documents.
(mxiii) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(nxiv) Except for the Loan, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(sxv) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreementaccounts.
(txvi) Borrower shall will pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(uxvii) Borrower shall will compensate each of its consultants and agents from its funds generated by the Collateral Asset or from other sources for services provided to it and pay from its own assets all obligations of any kind incurredthe Collateral Asset.
Appears in 1 contract
Sources: Loan Agreement (Inland Diversified Real Estate Trust, Inc.)
Single Purpose. (a) Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(ai) Borrower does has not own owned and will not own any asset or property other than (iA) the Individual PropertiesProperty, (B) the Prior Property, and (iiC) incidental personal property or other assets necessary for the ownership ownership, leasing or operation of the Individual PropertiesProperty and the Prior Property.
(bii) Borrower has not and will not engage in any business other than the ownership, management leasing, management, operation and operation financing of the Individual Properties, entering into Property and the Loan as a co-borrower Prior Property and Borrower has and will conduct and operate its business as presently conducted and operated.
(ciii) Borrower has not and will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(div) Borrower has not incurred and will not incur any Indebtedness Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (iA) the DebtDebt and the Prior Loan, (iiB) unsecured trade payables and operational debt indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note note, (3) on commercially reasonable terms and conditions, and (iii4) Indebtedness incurred in the financing of equipment and other personal property used at the Individual Properties; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid due not more than sixty (60) days from past the date incurred as and paid on or prior to such date, and/or (C) Permitted Equipment Leases; provided however, the matters aggregate amount of the indebtedness described in subclause (iiB) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (zC) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured shall not exceed at any time two percent (subordinate or pari passu2%) by any of the Individual Propertiesoutstanding principal amount of the Debt.
(ev) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.
(fvi) Borrower has been, is and will remain solvent and Borrower has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; provided, that, in each such case, there exists sufficient cash flow from the Property to do so.
(gvii) Borrower has done or caused to be done and will do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify modify, terminate or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party any SPC Party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(hviii) Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower has filed and will file its own tax returns (to the extent Borrower is required to file any such tax returns) and has not and will not file a consolidated federal income tax return with any other Person (except to the extent Borrower is a disregarded entity for federal income tax purposesas required or permitted by applicable Legal Requirements). Borrower shall has maintained and will maintain its books, records, resolutions and agreements as official records.
(iix) Borrower has been and will be, and at all times has and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), has and shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the otherother and has and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(jx) Borrower has maintained and 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 operationsoperations (provided that there exists sufficient cash flow from the Property to do so).
(kxi) Neither Borrower nor any constituent party has or will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(lxii) Borrower has not and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and has and will hold all of its assets in its own name.
(mxiii) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(nxiv) Borrower has not and will not guarantee, guarantee or become obligated for the debts of any other Person and does has not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(rxv) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Insolvency Opinion and any New Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Insolvency Opinion, and any New Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(sxvi) Borrower has not permitted, and will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreementaccounts.
(txvii) Borrower has paid and shall pay from its own funds its own liabilities and expenses, including any required Property-related expenses and the salaries of its own employees (if any) from its own funds and has maintained and shall maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(uxviii) Borrower has compensated and shall compensate each of its consultants and agents from its funds for services provided to it it, and has paid and shall pay from its own assets all obligations of any kind incurred.
(xix) Without the unanimous written consent of all of its partners or members, as applicable, and the consent of each Independent Director (regardless of whether such Independent Director is engaged at the Borrower or SPC Party level), Borrower has not and shall not: (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any state or federal bankruptcy or insolvency laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official, (c) take any action that might cause such entity to become insolvent, or (d) make an assignment for the benefit of creditors.
(b) Operating Lessee hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(i) Operating Lessee has not owned and will not own any asset or property other than (A) its leasehold interest in the Property, (B) its leasehold interest in the Prior Property, and (c) personal property necessary for the operation of the Property and the Prior Property.
(ii) Operating Lessee has not and will not engage in any business other than the management and operation of the Property and the Prior Property and Operating Lessee has and will conduct and operate its business as presently conducted and operated.
(iii) Operating Lessee has not and will not enter into any contract or agreement with any Affiliate of Operating Lessee, any constituent party of Operating Lessee or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.
(iv) Operating Lessee has not incurred and will not incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Prior Loan, (B) 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, and/or (C) Permitted Equipment Leases; provided however, the aggregate amount of the indebtedness described in (B) and (C) shall not exceed at any time two percent (2%) of the outstanding principal amount of the Debt.
(v) Operating Lessee has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.
(vi) Operating Lessee has been, is and will remain solvent and Operating Lessee has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; provided, that, in each such case, there exists sufficient cash flow from the Property to do so.
(vii) Operating Lessee has done or caused to be done and will do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and Operating Lessee will not, nor will Operating Lessee permit any constituent party to amend, modify, terminate or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Operating Lessee or any SPC Party (if any) without the prior consent of Lender.
(viii) Operating Lessee has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Operating Lessee’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Operating Lessee’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 Operating Lessee and such Affiliates and to indicate that Operating Lessee’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Operating Lessee has filed and will file its own tax returns (to the extent Operating Lessee is required to file any such tax returns) and has not and will not file a consolidated federal income tax return with any other Person (except as required or permitted by applicable Legal Requirements). Operating Lessee has maintained and will maintain its books, records, resolutions and agreements as official records.
(ix) Operating Lessee has been and will be, and at all times has and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Operating Lessee or any constituent party of Operating Lessee), has and shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the other and has and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(x) Operating Lessee has maintained and 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 (provided that there exists sufficient cash flow from the Property to do so).
(xi) Neither Operating Lessee nor any constituent party has or will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Operating Lessee.
(xii) Operating Lessee has not and will not commingle the funds and other assets of Operating Lessee with those of any Affiliate or constituent party or any other Person, and has and will hold all of its assets in its own name.
(xiii) Operating Lessee has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(xiv) Operating Lessee has not and will not guarantee or become obligated for the debts of any other Person and has not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(xv) Operating Lessee shall conduct its business so that the assumptions made with respect to Operating Lessee in the Insolvency Opinion and any New Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Operating Lessee hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Operating Lessee or any other Person) set forth in the Insolvency Opinion, and any New Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Operating Lessee and any SPC Party.
(xvi) Operating Lessee has not permitted, and will not permit any Affiliate or constituent party independent access to its bank accounts.
(xvii) Operating Lessee has paid and shall pay from its own funds its own liabilities and expenses, including any required Property-related expenses and the salaries of its own employees (if any) from its own funds and has maintained and shall maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(xviii) Operating Lessee has compensated and shall compensate each of its consultants and agents from its funds for services provided to it, and has paid and shall pay from its own assets all obligations of any kind incurred.
(xix) Without the unanimous written consent of all of its partners or members, as applicable, and the consent of each Independent Director (regardless of whether such Independent Director is engaged at the Operating Lessee or SPC Party level), Operating Lessee has not and shall not: (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any state or federal bankruptcy or insolvency laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official, (c) take any action that might cause such entity to become insolvent, or (d) make an assignment for the benefit of creditors.
(c) Each of Borrower and Operating Lessee hereby represents and warrants that each of Borrower and Operating Lessee (i) is and has always been duly formed, validly existing and in good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business; (ii) has not had and does not have any judgments or liens of any nature against it except for Permitted Encumbrances; (iii) has been and is in compliance, in all material respects, with all Legal Requirements and has received all material permits necessary for it to operate its contemplated business; (iv) is not the subject of,
Appears in 1 contract
Single Purpose. Each Borrower hereby represents and warrants toto Lender, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full, such Borrower:
(ai) Borrower has not owned, does not own and will not own any asset or property other than (iA) the Individual Propertiesits ownership interest in its respective Mortgage Borrower, and (iiB) incidental personal property or other assets necessary for the ownership or operation of the Individual Properties.with respect thereto;
(bii) Borrower has not engaged, does not engage and will not engage in any business other than the ownership, management and operation ownership of the Individual Properties, entering into the Loan as a co-borrower Collateral and Borrower will conduct and operate its business as presently proposed to be conducted and operated.;
(ciii) Borrower has not and will not enter into any contract or agreement agreement, with any Affiliate of Borrowerany Borrower Party, any constituent party of any Borrower Party or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party.;
(div) Borrower has not incurred and will not incur any Indebtedness Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation) other than (iA) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iiiB) Indebtedness liabilities incurred in the financing ordinary course of equipment and other personal property used at the Individual Properties; provided business relating to that any Indebtedness incurred pursuant Collateral in amounts not to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property exceed $10,000.00 in the aggregate, (y) paid aggregate which liabilities are not more than sixty (60) days from past the date incurred as to the matters in subclause (ii) above incurred, are not evidenced by a note and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due are paid when due; and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No no Indebtedness other than the Debt may be secured (subordinate subordinate, pari passu or pari passuotherwise) by any of the Individual Properties.Collateral;
(ev) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.;
(fvi) Borrower is and will intends to remain solvent and Borrower has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.;
(gvii) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor not and will Borrower not permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents Organizational Documents of the applicable Borrower or such constituent party without the prior written consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.;
(h1) Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts as official records, separate from those of its Affiliates and any constituent party. Borrower’s assets , (2) will not permit its assets to be listed as assets on the financial statement of any other Person; provided, however, that a Mortgage Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (iA) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of such Mortgage Borrower and such Affiliates and to indicate that such Mortgage Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person Person, and (iiB) such assets shall be listed on such Mortgage Borrower’s own separate balance sheet. Borrower ; and (3) has maintained and will maintain its own books, records, financial statements and bank accounts separate from any other Person.
(ix) has filed and will file its own tax returns (to the Borrower extent that it is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except Person, unless permitted to do so under the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.Code;
(ix) Borrower has been, will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of Affiliate of Borrower or any constituent party of any Borrower), shall correct any known misunderstanding regarding its status as a separate entity, has conducted and shall conduct business in its own name, has not identified and shall not identify itself or any of its Affiliates as a division or part of the other., and has maintained and utilized and shall maintain and utilize separate stationery, invoices and checks bearing its own name;
(jxi) Borrower will has maintained and intends 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.;
(kxii) Neither Borrower will not seek or effect nor permit any of its constituent party will parties to seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.it;
(lxiii) except with respect to another Borrower as contemplated by the Loan Documents, has not commingled and will not commingle the its funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and has held and will hold all of its assets in its own name.;
(mxiv) except with respect to another Borrower as contemplated by the Loan Documents, has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.;
(nxv) except, with respect to another Mortgage Borrower as contemplated by the Loan Documents, has not guaranteed or become obligated for and will not guarantee, guarantee or become obligated for the debts of any other Person and has not, does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.;
(ixvi) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party of any Borrower independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.accounts;
(txvii) except in the case of a Mortgage Borrower shall only, with respect to another Mortgage Borrower as contemplated by the TIC Agreement, has paid and will pay the salaries of its own employees (if any) from its own funds and will maintain a sufficient number of employees (if any) in light of its contemplated business operations.; and
(uxviii) Borrower shall has compensated and will compensate each of its consultants and agents from its funds for services provided to it and has paid and will pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Sources: First Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation ownership, operation, leasing, management and/or maintenance of the Individual PropertiesProperty.
(b) Borrower will not engage in any business other than the ownership, management financing, management, operation, leasing, maintenance and operation sale of the Individual Properties, entering into Property and other activities incidental thereto (in each case in accordance with the terms and provisions of this Agreement and the other Loan as a co-borrower and Borrower will conduct and operate its business as presently conducted and operatedDocuments).
(c) Borrower will not enter into any contract or agreement (other than the Exchange Documents) with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, 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 third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that (A) any Indebtedness incurred pursuant to subclause (ii) shall be (x) not more than sixty (60) days past the date incurred and (y) incurred in the ordinary course of business, and (B) any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Propertyin an aggregate amount not to exceed, not in excess of at any one time, three percent (3%) of the Allocated Loan Amount for such Individual Property in original principal balance of the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of businessLoan. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesProperty.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate 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.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Sources: Loan Agreement (Brookfield DTLA Fund Office Trust Investor Inc.)
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a1) Propco Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty and (2) Opco Borrower does not own and will not own any asset or property other than the personalty and other assets owned by it necessary for the operation of the Property.
(b1) Propco Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty and (2) Opco Borrower will not engage in any business other than the management and operation of the Property, entering into the Loan as a co-borrower and each Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair commercially reasonable (taking into account all facts and circumstances) and either substantially similar to those that would be available on an arm’s-length basis with third parties other than any such partyparty or a capital contribution or distribution.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) 5% of the Allocated outstanding principal amount of the Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any the Property other than Indebtedness of the Individual Propertiestype described in and subject to the requirements of clause (iii) of this clause (d).
(e) Except as expressly contemplated by the Loan Documents with respect to the other Borrower and the Cross Borrower, Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of any of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay all of its debts and liabilities (including, as applicable, a fairly allocated portion of shared personnel and overhead expenses) only from its own assets and as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities applicable to Borrower and preserve its Borrower’s existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates or makes such organizational documents inconsistent with the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements (it being acknowledged that the agent under the Cash Management Agency Agreement shall be continuously able to produce separate balance sheets of the Borrowers) and (except as contemplated in the Cash Management Agency Agreement) bank accounts separate from those of its Affiliates and from those of any constituent partyother Person. Borrower’s assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes theretoand/or in Annual Reports on Form 10-K filed with U.S. Securities and Exchange Commission in which such financial statements are contained) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall are continuously able to be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name (except with respect to payments or communications made on behalf of the Borrower by the counterparty to the Cash Management Agency Agreement, in which event, such counterparty shall nevertheless identify the Borrower as the party on whose behalf the payment or communication is being made).
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Except as expressly contemplated by the Loan Documents and the Cash Management Agency Agreement, Borrower will not commingle the funds and or other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as expressly contemplated by the Loan Documents with respect to the other Borrower and the Cross Borrower, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy or hold out its credit as being available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company company, (other than a single member limited liability companycompany that satisfies all of the requirements of Section 3.1 ..24(o)(ii)), each general partner or managing member (each, an “SPC Party”), as applicable, ) of Borrower shall be a corporation or a Delaware single member limited liability company acceptable to Lender that satisfies all of the requirements of Section 3.1 ..24(o)(ii) whose sole asset is its a direct interest in Borrower of at least 0.5% (or 0.1% if Borrower is an entity formed under the laws of Delaware) and each such SPC Party will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party (substituting the term “SPC Party” for the term ‘Borrower” throughout) and will cause Borrower to comply with this Section 3.1.24 (except for subsections (a), (b), (d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation constituent documents are substantially similar to those of such the withdrawing or disassociating SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. If Borrower is a limited partnership, Borrower shall have at least one genera] partner. If Borrower is a limited liability company (other than a single-member limited liability company that satisfies all of the requirements of Section 3.1 .24(o)(ii)), Borrower shall have at least one (1) managing member. An SPC Party shall be organized for the sole purpose of owning a direct interest in the Borrower, shall own no other interests in any entity, and shall not incur indebtedness except as it may be liable for the debts of the Borrower in its capacity as general partner of the Borrower.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company (“single member limited liability company” meaning a limited liability company having only one equity member), Borrower or such SPC Party shall be a limited liability company organized under the laws of Delaware and shall have at least either (A) two (2) non-equity members or (B) at least two springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower or its SPC Party shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower Independent Directors, who are provided by a nationally recognized company that provides professional independent directors (eachdirectors, an of each SPC Party and of Borrower if Borrower is a single member limited liability company. As used herein, “Independent Director”) and which are reasonably satisfactory to Lender ” shall mean a natural person serving as a director of a corporation or manager of a limited liability company who shall is not have been at the time of such individual’s appointment initial appointment, or at any time while serving as a director of such SPC Party and Borrowerserving, and may has not have been at any time during the preceding five years (i5) years: (a) a stockholder, stockholder or director (other than with the exception of serving as the Independent Director of Borrower or any SPC Party that is an Independent DirectorSPC Party or managing member of Borrower), trustee, officer, employee, partner, member, attorney or counsel of such SPC Party, Borrower or any Affiliate affiliate of either of them, ; (iib) a creditor, customer, supplier or other Person person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate affiliate of either of them them; (other than as an Independent Director), (iiic) a Person person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, Person excluded from serving as Independent Director under subparagraph (a) or (ivb); or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified Person excluded from serving as an Independent Director if such individual is at the time of initial appointment, under subparagraph (a) or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members(b). As used in this definition, the term “affiliate” means any person controlling, under common control with, or controlled by the person in question; and the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise.
. A natural person who satisfies the foregoing definition other than subparagraph (qb) Borrower shall not cause be disqualified from serving as an Independent Director if such individual has been provided by a nationally-recognized company that provides professional independent directors. A natural person who otherwise satisfies the foregoing definition except for being the Independent Director of a “special purpose entity” affiliated with Borrower or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document shall not be disqualified from serving as an Independent Director of Borrower or SPC Party, requires Party if such “special purpose entity” does not own a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower direct or indirect equity interest in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or in any other Person) co-borrower of Borrower and if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in Section 3.1.24 of this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty, entering into the Loan as a co-borrower and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregateAmount, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual Properties.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate 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.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.of
Appears in 1 contract
Sources: Loan Agreement (Wells Real Estate Investment Trust Inc)
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or property other than (i) the its Individual PropertiesProperty(ies), and (ii) incidental personal property or other assets necessary for the ownership or operation of the its Individual PropertiesProperty(ies).
(b) Borrower will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower and such Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of BorrowerBorrowers, any constituent party of Borrower Borrowers or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at the Individual PropertiesProperty(ies) that it owns; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to such Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesProperties except with respect to the Guaranty of Other Loans and the Guaranty Security Documents delivered by each Borrower in connection therewith.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and such Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate 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.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, other than as set forth in the Guaranty of Other Loans, or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Sources: Loan Agreement (Wells Real Estate Investment Trust Inc)
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a1) Propco Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty and (2) Opco Borrower does not own and will not own any asset or property other than the personalty and other assets owned by it necessary for the operation of the Property.
(b1) Propco Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty and (2) Opco Borrower will not engage in any business other than the management and operation of the Property, entering into the Loan as a co-borrower and each Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair commercially reasonable (taking into account all facts and circumstances) and either substantially similar to those that would be available on an arm’saim’s-length basis with third parties other than any such partyparty or a capital contribution or distribution.
(d) Borrower has not incurred incurred, and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) 5% of the Allocated outstanding principal amount of the Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any the Property other than Indebtedness of the Individual Propertiestype described in and subject to the requirements of clause (iii) of this clause (d).
(e) Except as expressly contemplated by the Loan Documents with respect to the other Borrower and the Cross Borrower, Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of any of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay all of its debts and liabilities (including, as applicable, a fairly allocated portion of shared personnel and overhead expenses) only from its own assets and as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities applicable to Borrower and preserve its Borrower’s existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates or makes such organizational documents inconsistent with the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements (it being acknowledged that the agent under the Cash Management Agency Agreement shall be continuously able to produce separate balance sheets of the Borrowers) and (except as contemplated in the Cash Management Agency Agreement) bank accounts separate from those of its Affiliates and from those of any constituent partyother Person. Borrower’s assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes theretoand/or in Annual Reports on Form 10-K filed with U.S. Securities and Exchange Commission in which such financial statements are contained) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall are continuously able to be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name (except with respect to payments or communications made on behalf of the Borrower by the counterparty to the Cash Management Agency Agreement, in which event, such counterparty shall nevertheless identify the Borrower as the party on whose behalf the payment or communication is being made).
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Except as expressly contemplated by the Loan Documents and the Cash Management Agency Agreement, Borrower will not commingle the funds and or other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as expressly contemplated by the Loan Documents with respect to the other Borrower and the Cross Borrower, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy or hold out its credit as being available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company company, (other than a single member limited liability companycompany that satisfies all of the requirements of Section 3.1.24(o)(ii)), each general partner or managing member (each, an “SPC Party”), as applicable, ) of Borrower shall be a corporation or a Delaware single member limited liability company acceptable to Lender that satisfies all of the requirements of Section 3.1.24(o)(ii) whose sole asset is its a direct interest in Borrower of at least 0.5% (or 0.1% if Borrower is an entity formed under the laws of Delaware) and each such SPC Party will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party (substituting the term “SPC Party” for the term “Borrower” throughout) and will cause Borrower to comply with this Section 3.1.24 (except for subsections (a), (b), (d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation constituent documents are substantially similar to those of such the withdrawing or disassociating SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. If Borrower is a limited partnership, Borrower shall have at least one general partner. If Borrower is a limited liability company (other than a single-member limited liability company that satisfies all of the requirements of Section 3.1 .24(o)(ii)), Borrower shall have at least one (1) managing member. An SPC Party shall be organized for the sole purpose of owning a direct interest in the Borrower, shall own no other interests in any entity, and shall not incur indebtedness except as it may be liable for the debts of the Borrower in its capacity as general partner of the Borrower.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company (“single member limited liability company” meaning a limited liability company having only one equity member), Borrower or such SPC Party shall be a limited liability company organized under the laws of Delaware and shall have at least either (A) two (2) non-equity members or (B) at least two springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower or its SPC Party shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower Independent Directors, who are provided by a nationally recognized company that provides professional independent directors (eachdirectors, an of each SPC Party and of Borrower if Borrower is a single member limited liability company. As used herein, “Independent Director”) and which are reasonably satisfactory to Lender ” shall mean a natural person serving as a director of a corporation or manager of a limited liability company who shall is not have been at the time of such individual’s appointment initial appointment, or at any time while serving as a director of such SPC Party and Borrowerserving, and may has not have been at any time during the preceding five years (i5) years: (a) a stockholder, stockholder or director (other than with the exception of serving as the Independent Director of Borrower or any SPC Party that is an Independent DirectorSPC Party or managing member of Borrower), trustee, officer, employee, partner, member, attorney or counsel of such SPC Party, Borrower or any Affiliate affiliate of either of them, ; (iib) a creditor, customer, supplier or other Person person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate affiliate of either of them them; (other than as an Independent Director), (iiic) a Person person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, Person excluded from serving as Independent Director under subparagraph (a) or (ivb); or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified Person excluded from serving as an Independent Director if such individual is at the time of initial appointment, under subparagraph (a) or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members(b). As used in this definition, the term “affiliate” means any person controlling, under common control with, or controlled by the person in question; and the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise.
. A natural person who satisfies the foregoing definition other than subparagraph (qb) Borrower shall not cause be disqualified from serving as an Independent Director if such individual has been provided by a nationally-recognized company that provides professional independent directors. A natural person who otherwise satisfies the foregoing definition except for being the Independent Director of a “special purpose entity” affiliated with Borrower or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document shall not be disqualified from serving as an Independent Director of Borrower or SPC Party, requires Party if such “special purpose entity” does not own a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower direct or indirect equity interest in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or in any other Person) co-borrower of Borrower and if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in Section 3.1.24 of this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that that, as of the date hereof hereof, at all times prior hereto and until such time as the Debt shall be paid in fullfull or its property is no longer subject to the Lien securing the Debt:
(ai) Borrower does It has not own owned and will not own any asset property or property any other assets other than (iA) with respect to the Individual PropertiesBorrower, the Properties currently owned by it, and (iiB) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property or other assets necessary for relating to the ownership ownership, leasing or operation of the Individual Properties.;
(bii) Borrower It was formed solely for the purpose of engaging in, and has not engaged and will not engage in in, any business other than the ownership, management leasing, management, financing and operation of the Individual Properties, entering into the Loan as a co-borrower and Borrower will conduct and operate its business as presently conducted and operated.;
(ciii) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of Borrowerits Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent party of Borrower parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarm's-length basis with third parties other than any such party.parties;
(div) Borrower has not incurred and It will not incur any Indebtedness indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred Permitted Indebtedness. Except as set forth in the financing of equipment and other personal property used at the Individual Properties; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Propertyimmediately preceding sentence, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than the Debt and the indebtedness described in clauses (iii) and (vi) of the Individual Properties.definition of Permitted Indebtedness may be secured (subordinate or pari passu) by any personal property;
(ev) Borrower has not made and Other than as provided in the Loan Documents, it will not make any loans or advances to to, and it will not pledge its assets for the benefit of, any third party other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), and shall not acquire obligations or securities of its Affiliates.any Affiliate or constituent party or any Affiliate of any constituent party;
(fvi) Borrower It is and will remain solvent and Borrower it will pay its debts and liabilities (including, as applicable, shared personnel including employment and overhead expenses) from its assets as the same shall become due.;
(gvii) Borrower It has done or caused to be done and will do all things necessary to observe organizational limited liability company formalities (in all material respects), as the case may be, and preserve its existence, and Borrower it will not, nor will Borrower it permit or suffer any constituent party to amend, modify or otherwise change the its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents or those of Borrower or such constituent party without the prior consent of Lender in any a manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by which would adversely affect its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.existence as a Single Purpose Entity;
(hviii) Borrower It has and will maintain all of its books, books and records, financial statements and bank accounts separate and apart from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower it will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower consolidation is required under GAAP, permitted for tax purposes or as a disregarded entity for federal income tax purposes. Borrower shall matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain its books, records, resolutions books of account and agreements as official records.accounts separate and apart from any other Person);
(iix) Borrower It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of Borrower or any constituent party of Borrowerparty), shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not identify itself limited to, paying for shared office space and services performed by any officer or any employee of its Affiliates as a division or part of the other.an Affiliate;
(jx) Borrower It has and 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.;
(kxi) Neither Borrower To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or effect the liquidation, dissolution, Operating Lessee's dissolution or winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.;
(lxii) Borrower It does not and will not commingle the its funds and other assets of Borrower with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other PersonPerson except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and will hold all Insurance Escrow Account and in each of its assets in its own name.the other Reserve Accounts;
(mxiii) Borrower It has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person.;
(nxiv) Borrower will not guaranteeExcept in its capacity as a co-obligor under the Notes together with the other Borrowers, or become obligated for the debts of any other Person and if applicable, it does not and will not hold itself or its credit out to be responsible for or have its credit available to satisfy satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts debts, securities or obligations of any other Person.;
(ixv) If Borrower it is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member either (each, an “SPC Party”), as applicable, a) at least one of its members is and shall be a corporation or a Delaware single member limited liability company acceptable to Lender Single Purpose Entity (the "SPE Member") whose sole asset is assets are its interest in the applicable Borrower or Operating Lessee and each such SPC Party will at all times complythat has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and will cause such Borrower or Operating Lessee shall be deemed hereby to comply, with have made each of the representations, warranties, warranties and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, 4.1(bb) with respect to the new SPC Party SPE Member, and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party the SPE Member shall have at least two (2) springing members, one Independent Directors as duly appointed members of which, upon the dissolution its board of such sole member directors or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, (b) it shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least have two (2) duly appointed members Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors SPE Member or (each, an “Independent Director”b) and which are reasonably satisfactory to Lender who shall not have been at the time of if such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of either of them, (iidirectors) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall will not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower permitted to take any action which, under applicable law or the terms of any certificate of incorporationincorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Partystock, requires a unanimous the vote of the its board of directors of each SPC Party and Borrower directors, unless at the time of such action there shall be at least two members of such board who are each Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Director.Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(rxvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the Nondate hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-Consolidation Opinion consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, ;
(ixix) all of the facts and assumptions (whether regarding the No Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower Operating Lessee will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, except that each Borrower and then in such circumstances, only in accordance Operating Lessee may commingle its funds with the terms funds of its respective Management Agreement.the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(txx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees (employees, if any) from its own funds , and maintain a sufficient number of employees (if any) in light of its contemplated business operations.;
(uxxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a1) Propco Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty and (2) Opco Borrower does not own and will not own any asset or property other than the personalty and other assets owned by it necessary for the operation of the Property.
(b1) Propco Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty and (2) Opco Borrower will not engage in any business other than the management and operation of the Property, entering into the Loan as a co-borrower and each Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair commercially reasonable (taking into account all facts and circumstances) and either substantially similar to those that would be available on an arm’s-length basis with third parties other than any such partyparty or a capital contribution or distribution.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) 5% of the Allocated outstanding principal amount of the Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any the Property other than Indebtedness of the Individual Propertiestype described in and subject to the requirements of clause (iii) of this clause (d).
(e) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of any of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay all of its debts and liabilities (including, as applicable, a fairly allocated portion of shared personnel and overhead expenses) only from its own assets and as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities applicable to Borrower and preserve its Borrower’s existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates or makes such organizational documents inconsistent with the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements (it being acknowledged that the agent under the Cash Management Agency Agreement shall be continuously able to produce separate balance sheets of the Borrowers) and (except as contemplated in the Cash Management Agency Agreement) bank accounts separate from those of its Affiliates and from those of any constituent partyother Person. Borrower’s assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be maybe, included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes theretoand/or in Annual Reports on Form 10-K filed with U.S. Securities and Exchange Commission in which such financial statements are contained) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall are continuously able to be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name (except with respect to payments or communications made on behalf of the Borrower by the counterparty to the Cash Management Agency Agreement, in which event, such counterparty shall nevertheless identify the Borrower as the party on whose behalf the payment or communication is being made).
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Except as expressly contemplated by the Loan Documents and the Cash Management Agency Agreement, Borrower will not commingle the funds and or other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy or hold out its credit as being available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company company, (other than a single member limited liability companycompany that satisfies all of the requirements of Section 3.l.24(o)(ii)), each general partner or managing member (each, an “SPC Party”), as applicable, ) of Borrower shall be a corporation or a Delaware single member limited liability company acceptable to Lender that satisfies all of the requirements of Section 3.1.24(o)(ii) whose sole asset is its a direct interest in Borrower of at least 0.5% (or 0.1% if Borrower is an entity formed under the laws of Delaware) and each such SPC Party will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party (substituting the term “SPC Party” for the term “Borrower” throughout) and will cause Borrower to comply with this Section 3.1.24 (except for subsections (a), (b), (d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation constituent documents are substantially similar to those of such the withdrawing or disassociating SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. If Borrower is a limited partnership, Borrower shall have at least one general partner. If Borrower is a limited liability company (other than a single-member limited liability company that satisfies all of the requirements of Section 3.1.24(o)(ii)), Borrower shall have at least one (1) managing member. An SPC Party shall be organized for the sole purpose of owning a direct interest in the Borrower, shall own no other interests in any entity, and shall not incur indebtedness except as it may be liable for the debts of the Borrower in its capacity as general partner of the Borrower.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company (“single member limited liability company” meaning a limited liability company having only one equity member), Borrower or such SPC Party shall be a limited liability company organized under the laws of Delaware and shall have at least either (A) two (2) non-equity members or (B) at least two springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower or its SPC Party shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower Independent Directors, who are provided by a nationally recognized company that provides professional independent directors (eachdirectors, an of each SPC Party and of Borrower if Borrower is a single member limited liability company. As used herein, “Independent Director”) and which are reasonably satisfactory to Lender ” shall mean a natural person serving as a director of a corporation or manager of a limited liability company who shall is not have been at the time of such individual’s appointment initial appointment, or at any time while serving as a director of such SPC Party and Borrowerserving, and may has not have been at any time during the preceding five years (i5) years: (a) a stockholder, stockholder or director (other than with the exception of serving as the Independent Director of Borrower or any SPC Party that is an Independent DirectorSPC Party or managing member of Borrower), trustee, officer, employee, partner, member, attorney or counsel of such SPC Party, Borrower or any Affiliate affiliate of either of them, ; (iib) a creditor, customer, supplier or other Person person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate affiliate of either of them them; (other than as an Independent Director), (iiic) a Person person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, Person excluded from serving as Independent Director under subparagraph (a) or (ivb); or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified Person excluded from serving as an Independent Director if such individual is at the time of initial appointment, under subparagraph (a) or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members(b). As used in this definition, the term “affiliate” means any person controlling, under common control with, or controlled by the person in question; and the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise.
. A natural person who satisfies the foregoing definition other than subparagraph (qb) Borrower shall not cause be disqualified from serving as an Independent Director if such individual has been provided by a nationally-recognized company that provides professional independent directors. A natural person who otherwise satisfies the foregoing definition except for being the Independent Director of a “special purpose entity” affiliated with Borrower or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document shall not be disqualified from serving as an Independent Director of Borrower or SPC Party, requires Party if such “special purpose entity” does not own a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower direct or indirect equity interest in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or in any other Person) co-borrower of Borrower and if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in Section 3.1.24 of this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that since Borrower’s creation, as of the date hereof and until such time as the Debt Obligations shall be paid and performed in full:
(a) Borrower has not owned, does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(b) Borrower has not engaged, does not engage, and will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower has not entered and will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, Debt and (ii) unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount not exceeding one percent (iii1%) Indebtedness incurred in of the financing original principal amount of equipment and other personal property used the Loan at the Individual Propertiesany one time; provided that any Indebtedness incurred pursuant to subclauses subclause (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts past due and payable in accordance with the provisions of this Agreement and (zy) incurred in the ordinary course of businessbusiness (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as “Permitted Indebtedness”). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesProperty.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will intends to remain solvent and Borrower will has and intends 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, the foregoing shall not be interpreted so as to require any member of Borrower or any constituent entity to contribute additional capital in connection therewith, it being expressly understood and agreed that this provision is solely for the purpose of preserving the bankruptcy remote aspects of Borrower.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will notnot terminate or fail to comply with the provisions of its organizational documents, nor will Borrower permit any constituent party to or amend, modify or otherwise change the its partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consentdocuments.
(h) Borrower has maintained and will maintain all of its accounts, books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent partyother Person. Borrower’s assets have not been and will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person Person, and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower has and will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposesPerson. Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and has and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), has and shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the other, and has and shall maintain and utilize separate invoices and checks bearing its own name.
(j) Borrower will has maintained and intends 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, the foregoing shall not be interpreted so as to require any member of Borrower or any constituent entity to contribute additional capital in connection therewith, it being expressly understood and agreed that this provision is solely for the purpose of preserving the bankruptcy remote aspects of Borrower.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower has not and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and has held and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower has not and will not guarantee, assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(io) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iiiii) all the organizational documents of the Borrower and any SPC PartyBorrower.
(sp) Borrower has not permitted and will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreementaccounts.
(tq) Borrower has paid and shall pay the salaries of its own employees (if any) from its own funds and has and shall maintain a sufficient number of employees (if any) in light of its contemplated business operations; provided, however, the foregoing shall not be interpreted so as to require any member of Borrower or any constituent entity to contribute additional capital in connection therewith, it being expressly understood and agreed that this provision is solely for the purpose of preserving the bankruptcy remote aspects of Borrower.
(ur) Borrower has compensated and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred; provided, however, the foregoing shall not be interpreted so as to require any member of Borrower or any constituent entity to contribute additional capital in connection therewith, it being expressly understood and agreed that this provision is solely for the purpose of preserving the bankruptcy remote aspects of Borrower.
(s) Borrower has not, and without the unanimous consent of all of its members, partners, directors or managers (including each Independent Director) will not, take any action that might cause Borrower to become insolvent.
(t) Borrower has allocated and will allocate fairly and reasonably shared expenses, including shared office space.
(u) Except in connection with the Loan, Borrower has not pledged and will not pledge its assets for the benefit of any other Person.
(v) Borrower either (i) has no, and will have no, obligation to indemnify its officers, directors, managers, members or partners, as the case may be, or (ii) if it has any such obligation, such obligation is fully subordinated to the Debt and will not constitute a claim against Borrower if cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation.
(w) Borrower will consider the interests of Borrower’s creditors in connection with all limited liability company or limited partnership actions.
(x) Except as provided in the Loan Documents, Borrower has not and will not have any of its obligations guaranteed by any Affiliate.
(y) The organizational documents of Borrower shall provide that except as may be expressly permitted herein as long as any portion of the Obligations remain outstanding, Borrower will not without the prior written consent of Lender, not to be unreasonably withheld, conditioned or delayed:
(i) except in connection with a sale or other transfer permitted under the Loan Documents, sell all or substantially all of its assets;
(ii) amend its organizational documents with respect to the matters set forth in this Section 3.1.24, without the consent of Lender; or
Appears in 1 contract
Sources: Loan Agreement (O'Donnell Strategic Industrial REIT, Inc.)
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a1) Propco Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty and (2) Opco Borrower does not own and will not own any asset or property other than the personalty and other assets owned by it necessary for the operation of the Property.
(b1) Propco Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty and (2) Opco Borrower will not engage in any business other than the management and operation of the Property, entering into the Loan as a co-borrower and each Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair commercially reasonable (taking into account all facts and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such partyparty or a capital contribution or distribution.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) ). unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) 5% of the Allocated outstanding principal amount of the Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any the Property other than Indebtedness of the Individual Propertiestype described in and subject to the requirements of clause (iii) of this clause (d).
(e) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of any of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay all of its debts and liabilities (including, as applicable, a fairly allocated portion of shared personnel and overhead expenses) only from its own assets and as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities applicable to Borrower and preserve its Borrower’s existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates or makes such organizational documents inconsistent with the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements (it being acknowledged that the agent under the Cash Management Agency Agreement shall be continuously able to produce separate balance sheets of the Borrowers) and (except as contemplated in the Cash Management Agency Agreement) bank accounts separate from those of its Affiliates and from those of any constituent partyother Person. Borrower’s assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes theretoand/or in Annual Reports on Form 10-K filed with U.S. Securities and Exchange Commission in which such financial statements are contained) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall are continuously able to be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name (except with respect to payments or communications made on behalf of the Borrower by the counterparty to the Cash Management Agency Agreement, in which event, such counterparty shall nevertheless identify the Borrower as the party on whose behalf the payment or communication is being made).
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Except as expressly contemplated by the Loan Documents and the Cash Management Agency Agreement, Borrower will not commingle the funds and or other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy or hold out its credit as being available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company company, (other than a single member limited liability companycompany that satisfies all of the requirements of Section 3.1.24(o)(ii)), each general partner or managing member (each, an “SPC Party”), as applicable, ) of Borrower shall be a corporation or a Delaware single member limited liability company acceptable to Lender that satisfies all of the requirements of Section 3.1.24(o)(ii) whose sole asset is its a direct interest in Borrower of at least 0.5% (or 0.1% if Borrower is an entity formed under the laws of Delaware) and each such SPC Party will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party (substituting the term “SPC Party” for the term “Borrower” throughout) and will cause Borrower to comply with this Section 3.1.24 (except for subsections (a), (b), (d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation constituent documents are substantially similar to those of such the withdrawing or disassociating SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. If Borrower is a limited partnership, Borrower shall have at least one general partner. If Borrower is a limited liability company (other than a single-member limited liability company that satisfies all of the requirements of Section 3.l.24(o)(ii)), Borrower shall have at least one (1) managing member. An SPC Party shall be organized for the sole purpose of owning a direct interest in the Borrower, shall own no other interests in any entity, and shall not incur indebtedness except as it may be liable for the debts of the Borrower in its capacity as general partner of the Borrower.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company (“single member limited liability company” meaning a limited liability company having only one equity member), Borrower or such SPC Party shall be a limited liability company organized under the laws of Delaware and shall have at least either (A) two (2) non-equity members or (B) at least two springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower or its SPC Party shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower Independent Directors, who are provided by a nationally recognized company that provides professional independent directors (eachdirectors, an of each SPC Party and of Borrower if Borrower is a single member limited liability company. As used herein, “Independent Director”) and which are reasonably satisfactory to Lender ” shall mean a natural person serving as a director of a corporation or manager of a limited liability company who shall is not have been at the time of such individual’s appointment initial appointment, or at any time while serving as a director of such SPC Party and Borrowerserving, and may has not have been at any time during the preceding five years (i5) years: (a) a stockholder, stockholder or director (other than with the exception of serving as the Independent Director of Borrower or any SPC Party that is an Independent DirectorSPC Party or managing member of Borrower), trustee, officer, employee, partner, member, attorney or counsel of such SPC Party, Borrower or any Affiliate affiliate of either of them, ; (iib) a creditor, customer, supplier or other Person person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate affiliate of either of them them; (other than as an Independent Director), (iiic) a Person person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, Person excluded from serving as Independent Director under subparagraph (a) or (ivb); or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified Person excluded from serving as an Independent Director if such individual is at the time of initial appointment, under subparagraph (a) or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members(b). As used in this definition, the term “affiliate” means any person controlling, under common control with, or controlled by the person in question; and the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise.
. A natural person who satisfies the foregoing definition other than subparagraph (qb) Borrower shall not cause be disqualified from serving as an Independent Director if such individual has been provided by a nationally-recognized company that provides professional independent directors. A natural person who otherwise satisfies the foregoing definition except for being the Independent Director of a “special purpose entity” affiliated with Borrower or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document shall not be disqualified from serving as an Independent Director of Borrower or SPC Party, requires Party if such “special purpose entity” does not own a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower direct or indirect equity interest in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or in any other Person) co-borrower of Borrower and if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in Section 3.1.24 of this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
Appears in 1 contract
Single Purpose. (a) Each Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(ai) Borrower does has not own owned and will not own any asset or property other than (iA) the Individual PropertiesProperty and the TIF Loan, and (iiB) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(bii) Borrower has not and will not engage in any business other than the ownership, management leasing, management, operation and operation financing of the Individual Properties, entering into the Loan as a co-borrower Property and Borrower has and will conduct and operate its business as presently conducted and operated.
(ciii) Borrower has not and will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(div) Borrower has not incurred and will not incur any Indebtedness Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (iA) the Debt, the Prior Loans, and, with respect to Philadelphia Borrower, the TIF Loan, (iiB) unsecured trade payables and operational debt indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note note, (3) on commercially reasonable terms and conditions, and (iii4) Indebtedness incurred in the financing of equipment and other personal property used at the Individual Properties; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid due not more than sixty (60) days from past the date incurred as and paid on or prior to such date, and/or (C) Permitted Equipment Leases; provided however, the aggregate amount of the indebtedness described in (B) and (C), together with the Indebtedness of Operating Lessee set forth in Section 3.1.24(b)(iv)(A) and (B) hereof, shall not exceed, collectively, for all Borrowers, for all Individual Properties, in the aggregate, at any time, five percent (5%) of the initial principal amount of the Debt allocable to the matters in subclause (ii) above and not more than sixty (60) days from Individual Properties securing the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual PropertiesLoan at such time.
(ev) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party) (other than the TIF Loan), and has not and shall not acquire obligations or securities of its Affiliates.
(fvi) Borrower has been, is and will intends to remain solvent and Borrower has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; provided, that, in each such case, there exists sufficient cash flow from the Property to do so and shall not require an equity owner to make additional capital contributions to Borrower.
(gvii) Borrower has done or caused to be done and will do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify modify, terminate or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party in any material respect without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(hviii) Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be also listed on Borrower’s own separate balance sheet. Borrower has filed and will file its own tax returns (to the extent Borrower is required to file any such tax returns) or has filed and will not file a consolidated federal income tax return with any other another Person except to the extent Borrower is a disregarded entity for federal income tax purposesas required and/or permitted by applicable Legal Requirements. Borrower shall has maintained and will maintain its books, records, resolutions and agreements as official records.
(iix) Borrower has been and will be, and at all times has and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower (or any constituent party of Borrower), has and shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the otherother and has and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(jx) Borrower has maintained and 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 operationsoperations (provided that there exists sufficient cash flow from the Property to do so) and shall not require any equity owner to make additional capital contributions to Borrower.
(kxi) Neither Borrower nor any constituent party has or will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(lxii) Borrower has not and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, except with respect to any co-Borrower, and has and will hold all of its assets in its own name.
(mxiii) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(nxiv) Borrower has not and will not guarantee, guarantee or become obligated for the debts of any other Person and does has not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person, other than debts or obligations of Operating Lessee relating to the Property incurred in the ordinary course of business or as evidenced by the Loan Documents, including but not limited to, guaranteeing any Franchise Agreement or Brand Management Agreement for an Individual Property.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(rxv) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Insolvency Opinion and any New Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Insolvency Opinion, and any New Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(sxvi) Borrower has not permitted, and will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreementaccounts.
(txvii) Borrower has paid and, subject to sufficient cash flow from the Property, shall pay from its own funds its own liabilities and expenses, including all Property-related expenses and the salaries of its own employees (if any) from its own funds and has maintained and shall maintain a sufficient number of employees (if any) in light of its contemplated business operations, provided the foregoing shall not require any equity owner to make additional capital contributions to Borrower.
(uxviii) Borrower has compensated and, subject to sufficient cash flow from the Property, shall compensate each of its consultants and agents from its funds for services provided to it it, and has paid and shall pay from its own assets all obligations of any kind incurred, provided that, the foregoing shall not require any equity owner to make any additional capital contributions to Borrower.
(xix) Without the unanimous written consent of all of its partners or members, as applicable, and the consent of each Independent Manager (regardless of whether such Independent Manager is engaged at the Borrower or SPC Party level), Borrower has not and shall not: (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any state or federal bankruptcy or insolvency laws, (b) seek or consent (other than a consent to a request made by Lender) to the appointment of a receiver, liquidator or any similar official, or (c) make an assignment for the benefit of creditors.
(b) Each Operating Lessee hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(i) Operating Lessee has not owned and will not own any asset or property other than (A) its leasehold interest in the Property and (B) tangible and intangible personal property necessary for the current ownership or operation of the Property.
(ii) Operating Lessee has not and will not engage in any business other than the leasing, management and operation of the Property and Operating Lessee has and will conduct and operate its business as presently conducted and operated.
(iii) Operating Lessee has not and will not enter into any contract or agreement with any Affiliate of Operating Lessee, any constituent party of Operating Lessee or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.
(iv) Operating Lessee has not incurred and will not incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) 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, and/or (B) Permitted Equipment Leases; provided however, the aggregate amount of the indebtedness described in (A) and (B), together with the Indebtedness of Borrower set forth in Section 3.1.24(a)(iv)(B) and (C) hereof, shall not exceed, collectively, for Mortgage Operating Lessee for all Individual Properties, in the aggregate, at any time, five percent (5%) of the initial principal amount of the Debt allocable to the Individual Properties securing the Loan at such time.
(v) Operating Lessee has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), other than working capital advances to Manager pursuant to the terms of the Management Agreement and has not and shall not acquire obligations or securities of its Affiliates.
(vi) Operating Lessee has been, is and will remain solvent and Operating Lessee has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; provided, that, in each such case, there exists sufficient cash flow from the Property to do so and shall not require any equity owner to make additional capital contributions to Borrower.
(vii) Operating Lessee has done or caused to be done and will do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and Operating Lessee will not, nor will Operating Lessee permit any constituent party to amend, modify, terminate or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Operating Lessee in any material respect without the prior consent of Lender.
(viii) Operating Lessee has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Operating Lessee’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Operating Lessee’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 Operating Lessee and such Affiliates and to indicate that Operating Lessee’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 Borrower’s own separate balance sheet. Operating Lessee has filed and will file its own tax returns (to the extent Operating Lessee is required to file any such tax returns) or has filed and will file a consolidated federal income tax return with another Person as required and/or permitted by applicable Legal Requirements. Operating Lessee has maintained and will maintain its books, records, resolutions and agreements as official records.
(ix) Operating Lessee has been and will be, and at all times has and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Operating Lessee or any constituent party of Operating Lessee), has and shall correct any known misunderstanding regarding its status as a separate entity, has and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the other and has and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(x) Operating Lessee has maintained and 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 (provided that there exists sufficient cash flow from the Property to do so) and shall not require any equity owner to make additional capital contributions to Operating Lessee.
(xi) Neither Operating Lessee nor any constituent party has or will seek or effect the liquidation, dissolution, winding up, consolidation or merger, in whole or in part, of Operating Lessee.
(xii) Operating Lessee has not and will not commingle the funds and other assets of Operating Lessee with those of any Affiliate or constituent party or any other Person, and has and will hold all of its assets in its own name.
(xiii) Operating Lessee has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(xiv) Operating Lessee has not and will not guarantee or become obligated for the debts of any other Person and has not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(xv) Operating Lessee shall conduct its business so that the assumptions made with respect to Operating Lessee in the Insolvency Opinion and any New Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Operating Lessee hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Operating Lessee or any other Person) set forth in the Insolvency Opinion, and any New Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Operating Lessee and any SPC Party.
(xvi) Operating Lessee has not permitted, and will not permit any Affiliate or constituent party independent access to its bank accounts.
(xvii) Operating Lessee has paid and, subject to sufficient cash flow from the Property, shall pay from its own funds its own liabilities and expenses, including all Property-related expenses and the salaries of its own employees (if any) from its own funds and has maintained and shall ma
Appears in 1 contract
Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a1) Propco Borrower does not own and will not own any asset or property other than (i) the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty and (2) Opco Borrower does not own and will not own any asset or property other than the personalty and other assets owned by it necessary for the operation of the Property.
(b1) Propco Borrower will not engage in any business other than the ownership, management and operation of the Individual PropertiesProperty and (2) Opco Borrower will not engage in any business other than the management and operation of the Property, entering into the Loan as a co-borrower and each Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair commercially reasonable (taking into account all facts and circumstances) and either substantially similar to those that would be available on an arm’s-length basis with third parties other than any such partyparty or a capital contribution or distribution.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent (3%) 5% of the Allocated outstanding principal amount of the Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement above and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any the Property other than Indebtedness of the Individual Propertiestype described in and subject to the requirements of clause (iii) of this clause (d).
(e) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of any of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay all of its debts and liabilities (including, as applicable, a fairly allocated portion of shared personnel and overhead expenses) only from its own assets and as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities applicable to Borrower and preserve its Borrower’s existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates or makes such organizational documents inconsistent with the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements (it being acknowledged that the agent under the Cash Management Agency Agreement shall be continuously able to produce separate balance sheets of the Borrowers) and bank (except as contemplated in the Cash Management Agency Agreement) ▇▇▇▇ accounts separate from those of its Affiliates and from those of any constituent partyother Person. Borrower’s assets will not be listed as assets on the financial statement of any other Person; , provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes theretoand/or in Annual Reports on Form 10-K filed with U.S. Securities and Exchange Commission in which such financial statements are contained) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall are continuously able to be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the extent Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes). Borrower shall maintain its bookshooks, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the otherother and shall maintain and utilize separate stationery, invoices and checks bearing its own name (except with respect to payments or communications made on behalf of the Borrower by the counterparty to the Cash Management Agency Agreement, in which event, such counterparty shall nevertheless identify the Borrower as the party on whose behalf the payment or communication is being made).
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Except as expressly contemplated by the Loan Documents and the Cash Management Agency Agreement, Borrower will not commingle the funds and or other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Except as expressly contemplated by the Loan Documents with respect to the other Borrower, Borrower will not guarantee, guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy or hold out its credit as being available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company company, (other than a single member limited liability companycompany that satisfies all of the requirements of Section 3.1.24(o)(ii)), each general partner or managing member (each, an “SPC Party”), as applicable, ) of Borrower shall be a corporation or a Delaware single member limited liability company acceptable to Lender that satisfies all of the requirements of Section 3.1.24(o)(ii) whose sole asset is its a direct interest in Borrower of at least 0.5% (or 0.1% if Borrower is an entity formed under the laws of Delaware) and each such SPC Party will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party (substituting the term “SPC Party” for the term Borrower” throughout) and will cause Borrower to comply with this Section 3.1.24 (except for subsections (a), (b), (d), (n) and (x)). Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation constituent documents are substantially similar to those of such the withdrawing or disassociating SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. If Borrower is a limited partnership, Borrower shall have at least one general partner. If Borrower is a limited liability company (other than a single-member limited liability company that satisfies all of the requirements of Section 3.1.24(o)(ii)), Borrower shall have at least one (1) managing member. An SPC Party shall be organized for the sole purpose of owning a direct interest in the Borrower, shall own no other interests in any entity, and shall not incur indebtedness except as it may be liable for the debts of the Borrower in its capacity as general partner of the Borrower.
(ii) If Borrower or any SPC Party of if Borrower is a single member limited liability company (“single member limited liability company” meaning a limited liability company having only one equity member), Borrower or such SPC Party shall be a limited liability company organized under the laws of Delaware and shall have at least either (A) two (2) non-equity members or (B) at least two springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC PartyBorrower, shall immediately become the sole member of Borrower or such SPC PartyBorrower, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower or its SPC Party shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower Independent Directors, who are provided by a nationally recognized company that provides professional independent directors (eachdirectors, an of each SPC Party and of Borrower if Borrower is a single member limited liability company. As used herein, “Independent Director”) and which are reasonably satisfactory to Lender ” shall mean a natural person serving as a director of a corporation or manager of a limited liability company who shall is not have been at the time of such individual’s appointment initial appointment, or at any time while serving as a director of such SPC Party and Borrowerserving, and may has not have been at any time during the preceding five years (i5) years: (a) a stockholder, stockholder or director (other than with the exception of serving as the Independent Director of Borrower or any SPC Party that is an Independent DirectorSPC Party or managing member of Borrower), trustee, officer, employee, partner, member, attorney or counsel of such SPC Party, Borrower or any Affiliate affiliate of either of them, ; (iib) a creditor, customer, supplier or other Person person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate affiliate of either of them them; (other than as an Independent Director), (iiic) a Person person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, Person excluded from serving as Independent Director under subparagraph (a) or (ivb); or (d) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified Person excluded from serving as an Independent Director if such individual is at the time of initial appointment, under subparagraph (a) or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members(b). As used in this definition, the term “affiliate” means any person controlling, under common control with, or controlled by the person in question; and the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise.
. A natural person who satisfies the foregoing definition other than subparagraph (qb) Borrower shall not cause be disqualified from serving as an Independent Director if such individual has been provided by a nationally-recognized company that provides professional independent directors. A natural person who otherwise satisfies the foregoing definition except for being the Independent Director of a “special purpose entity” affiliated with Borrower or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document shall not be disqualified from serving as an Independent Director of Borrower or SPC Party, requires Party if such “special purpose entity” does not own a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower direct or indirect equity interest in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or in any other Person) co-borrower of Borrower and if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors. For purposes of this paragraph, a “special purpose entity” is an entity, whose organizational documents contain restrictions on its activities substantially similar to those set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in Section 3.1.24 of this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.
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Single Purpose. Borrower hereby represents and warrants to, and covenants with, Lender that as of the date hereof and until such time as the Debt shall be paid in full:
(a) Borrower does not own and will not own any asset or property other than (i) its interest in the Individual PropertiesProperty, and (ii) incidental personal property or other assets necessary for the ownership or operation of the Individual PropertiesProperty.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Individual Properties, entering into the Loan as a co-borrower Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness other than (i) the Debt, (ii) unsecured trade payables and operational debt not evidenced by a note and (iii) Indebtedness incurred in the financing of equipment and other personal property used at on the Individual PropertiesProperty; provided that any Indebtedness incurred pursuant to subclauses (ii) and (iii) shall be (x) for each Individual Property, not in excess of three percent Four Million and No/100 Dollars (3%$4,000,000.00) of the Allocated Loan Amount for such Individual Property in the aggregate, (y) paid not more than sixty (60) days from the date incurred as to the matters in subclause (ii) above and not more than sixty (60) days from the date due as to the matters in subclause (iii) above, subject only to Borrower’s right to diligently prosecute a good faith dispute as to amounts due and payable in accordance with the provisions of this Agreement and (z) incurred in the ordinary course of business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the Individual Properties.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Lender’s consent.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements (or the notes thereto) to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower will file its own tax returns (to the Borrower is required to file any such tax returns) and will not file a consolidated federal income tax return with any other Person except to the extent Borrower is a disregarded entity for federal income tax purposes. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), shall correct any known misunderstanding regarding its status as a separate 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.
(j) Borrower 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.
(k) Neither Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.
(n) Borrower will not guarantee, or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person.
(i) If Borrower is a limited partnership or a limited liability company (other than a single member limited liability company), each general partner or managing member (each, an “SPC Party”), as applicable, shall be a corporation or a Delaware single member limited liability company acceptable to Lender whose sole asset is its interest in Borrower and each such SPC Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 as if such representation, warranty or covenant was made directly by such SPC Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower, Borrower shall immediately appoint a new SPC Party whose articles of incorporation are substantially similar to those of such SPC Party and deliver a new non-consolidation opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners.
(ii) If Borrower or any SPC Party of Borrower is a single member limited liability company, Borrower or such SPC Party shall have at least two (2) springing members, one of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower or such SPC Party, shall immediately become the sole member of Borrower or such SPC Party, and the other of which shall become the sole member of Borrower or such SPC Party if the first such springing member no longer is available to serve as such sole member.
(p) Borrower shall at all times cause there to be at least two (2) duly appointed members of the board of directors of each SPC Party and the Borrower who are provided by a nationally recognized company that provides professional independent directors (each, an “Independent Director”) and which are reasonably satisfactory to Lender who shall not have been at the time of such individual’s appointment or at any time while serving as a director of such SPC Party and Borrower, and may not have been at any time during the preceding five years (i) a stockholder, director (other than as an Independent Director), officer, employee, partner, attorney or counsel of such SPC Party, Borrower or any Affiliate of either of them, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such SPC Party, Borrower or any Affiliate of either of them (other than as an Independent Director), (iii) a Person or other entity controlling or under common control with any such stockholder, partner, customer, supplier or other Person, or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other Person. A natural person who otherwise satisfies the foregoing definition of Independent Director except for being the independent director, manager or special member of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall not be disqualified from serving as an Independent Director if such individual is at the time of initial appointment, or at any time while serving as an Independent Director, is an independent manager, director or special member provided by a nationally-recognized company that provides professional independent managers, directors or special members. As used in this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.
(q) Borrower shall not cause or permit the board of directors of any SPC Party and Borrower to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock or under any organizational document of Borrower or SPC Party, requires a unanimous vote of the board of directors of each SPC Party and Borrower unless at the time of such action there shall be at least two members who are each an Independent Director.
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Non-Consolidation Opinion shall be true and correct in all respects. In connection with the foregoing, Borrower hereby covenants and agrees that it will comply with or cause the compliance with, (i) all of the facts and assumptions (whether regarding the Borrower or any other Person) set forth in the Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of the Borrower and any SPC Party.
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts other than a Manager approved by Lender, and then in such circumstances, only in accordance with the terms of its respective Management Agreement.
(t) Borrower shall pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.
(u) Borrower shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.above and
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