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 Obligations shall be paid and performed in full: (a) None of Borrowers owns or will own any asset or property other than (i) its respective Property and (ii) incidental personal property necessary for the ownership or operation of such Property. (b) None of Borrowers has engaged or will engage in any business other than the ownership, management and operation of its respective Property and 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 arms-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 in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (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 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 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, and will do, all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or fail to comply with the provisions of its organizational documents, 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 its operating agreement or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material. (h) Such Borrower will maintain separate books, records, financial statements and bank accounts from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower will file its own tax returns (to the extent such Borrower is required to file any tax returns) and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such 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. (j) Such Borrower 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, 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 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. (o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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.
Appears in 1 contract
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender with regard to itself only that (i) since the date of each Mortgage Borrower’s formation and no other Borrower, that as of at all times on and after the date hereof and until such time as the Obligations Debt shall be paid and performed in full, each Mortgage Borrower has been, and Borrower will cause each Mortgage Borrower to be, in compliance with the single purpose entity requirements set forth in Section 5.1.14 of the Mortgage Loan Agreement and (ii) since the date of Borrower’s formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full, Borrower shall be a Person, other than an individual, that:
(a) None of Borrowers owns is formed or will own any asset or property other than (i) its respective Property and (ii) incidental personal property necessary organized solely for the purpose of holding, directly or indirectly, an ownership or operation of such Property.interest in the Mortgage Borrowers;
(b) None of Borrowers has engaged or will does not engage in any business other than the ownership, ownership and management and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.the Mortgage Borrowers;
(c) Borrower has does not entered have any (i) assets other than those related to its interest in the Mortgage Borrower(s) or (ii) Indebtedness (except for the Debt and will any Permitted Indebtedness);
(d) does not guarantee or otherwise become liable on or in connection with any obligation of any other Person;
(e) does not enter into any contract or agreement with any stockholder, partner, principal, member or Affiliate of any Borrower, any constituent party of any Borrower such Person or any Affiliate of any constituent partysuch stockholder, partner, principal, member or Affiliate except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than any such party.an Affiliate;
(df) Such Borrower has does not incurred and will not incur incur, create or assume any Indebtedness other than (i) except for the Debt, Debt and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (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 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.;
(eg) Such Borrower has not made and will does not make any loans or advances to any third party other Person (including including, without limitation, any Affiliate or constituent partyAffiliate), and has not and shall not acquire securities of its Affiliates.;
(fh) Such Borrower is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such Borrower will does not become insolvent or fail to 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, and will do, all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or does not fail to comply with the provisions of conduct and operate its organizational documents, or (ii) unless (A) Lender has consented business in all material respects as previously conducted and (B) following a Securitization of the Loan, the applicable Rating Agencies have issued a Rating Agency Confirmation, amend, modify or otherwise change its operating agreement or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.operated;
(hj) Such Borrower will does not fail to pay its debts from its assets as the same shall become due;
(k) does not fail to maintain separate books, records, financial statements its books and records and bank accounts separately from those of its Affiliates Affiliates, including, without limitation, its general partners or members, as may be applicable;
(l) does not fail at all times to hold itself out to the public as a legal entity separate and apart from any other Person. Such Borrower's assets will not be listed as assets on the financial statement Person (including, without limitation, any Affiliate (including, without limitation, any stockholder, partner, member, trustee, beneficiary, or other owner of such Borrower or any Affiliate of any such stockholder, partner, member, trustee, beneficiary, or other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements owner);
(m) does not fail to indicate the separateness of such Borrower. Such Borrower will file its own tax returns (to the extent such Borrower that it is legally required to do so (Borrower shall file any its own tax returns) returns and will shall not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its booksPerson, recordsexcept that Borrower’s tax returns may include the Mortgage Borrowers, resolutions and agreements as official records.if applicable);
(in) 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.
(j) Such Borrower has maintained and intends does not fail to maintain adequate capital for the its normal obligations obligations, reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.;
(ko) Neither such Borrower nor any constituent party will seek or effect the liquidation, dissolution, winding up, 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 does not fail 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 is 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.
(np) Except as contemplated by this Agreement, such Borrower has not and will not 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 Indebtedness of any other Person.;
(oq) The is subject to and complies with all of the limitations on powers set forth in the organizational documents documentation (and if a partnership, that of each general partner, and if a limited liability company, that of the managing member (or if there is no managing member, the members)) as in effect on the date hereof;
(r) holds all of its assets in its own name and does not commingle its assets with the assets of any other Person;
(s) utilizes such Borrower Borrower’s own letterhead, invoices and checks, provided however that Borrowers utilizes a central account containing revenue of each of the Properties which account is used only to pay expenses related solely to the Properties;
(t) holds title to its interest in the Mortgage Borrowers in its own name;
(u) allocates fairly and reasonably any overhead expenses that are shared with any Affiliate including, without limitation, paying for office space and services performed by any employee of any Affiliate;
(v) does not pledge its assets for the benefit of any other Person, other than pursuant to the Loan Documents as security for the Loan;
(w) corrects any known misunderstandings regarding its separate identity;
(x) has Organizational Documents that shall provide that the business and affairs of such Borrower shall be managed by Plymouth Industrial 20 Financial, subject to the rights of TL Member set forth in Borrower’s Organizational Documents, or under the direction of a board of one or more directors or managers designated by Sole MemberPlymouth Industrial 20 Financial, subject to the rights of TL Member set forth in Borrower’s Organizational Documents, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "“Independent Director"Manager”) of such Borrower who shall not have been Borrower, each of whom (i) has at the time of such individual's appointment or at any time least three (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 3) years prior employment experience and continues to be a employed as an independent director, independent manager or independent member by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors, independent managers and independent members, another nationally-recognized company that provides such services and which is reasonably approved by Lender; (ii) is not on the board of directors or managers of more than two (2) Affiliates of Borrower; and (iii) is not, and has never been, and will not, while serving as an Independent DirectorManager be, and may not have been at any time during of the preceding five following: (5) years (iA) a stockholder, director (other than as an Independent Director)director, manager, officer, employee, partner, member, attorney or counsel of such Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect equity holder of any other Borrowerof them, (iiB) a creditor, customer, supplier supplier, service provider (including provider of professional services) or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of such BorrowerBorrower (other than a nationally-recognized company that routinely provides professional independent directors, independent managers or independent members and other corporate services to Borrower or any Affiliate of Borrower in the ordinary course of its business), (iii) a Person or other entity Controlling or under common Control with any such stockholder, partner, customer, supplier or other Person, or (ivC) a member of the immediate family of any such stockholder, director, manager, officer, employee, partner, member, creditor, customer, supplier supplier, service provider or other Person., or (D) a Person controlling or under common control with any of (A), (B) or (C) above. A natural person who satisfies the foregoing definition other than clause (iii) shall not be disqualified as a result of clause (iii)(A) by reason of (I) being, having been or becoming an Independent Manager of an Affiliate of Borrower that is not in the direct chain of ownership of Borrower or Plymouth Industrial 20 Financial and that is required by a creditor to be a “single purpose entity”; provided that such Independent Manager is, was or will be employed by a company that routinely provides professional independent directors, independent managers or independent members, or (II) being, having been or becoming a member of Borrower pursuant to an express provision in Borrower’s operating agreement providing for the appointment of such Independent Manager as a member of Borrower upon the occurrence of any event pursuant to which Plymouth Industrial 20 Financial ceases to be a member of Borrower (including the withdrawal or dissolution of Plymouth Industrial 20 Financial). A natural person who satisfies the foregoing definition other than clause (iii) shall not be disqualified as a result of clause (iii)(A) or (iii)(B) by reason of being, having been or becoming an Independent Manager of a “single purpose entity” affiliated with Borrower; provided that the fees or other compensation that such individual earns by serving as an Independent Manager of one or more Affiliates of Borrower in any given year constitute, in the aggregate, less than five percent (5%) of such individual’s income for such year. The Organizational Documents of Borrower shall provide that no Independent Manager of Borrower may be removed or replaced without Cause, and unless Borrower provides Lender with not less than three (3) Business Days’ prior notice of (1) any proposed removal of any Independent Manager, together with a statement as to the reasons for such removal, and (2) the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements set forth in the Organizational Documents of Borrower relating to an Independent Manager. In addition, the Organizational Documents of Borrower shall provide an express acknowledgment that Lender is an intended third-party beneficiary of the “special purpose” and “separateness” provisions of such Organizational Documents. As used in this paragraph, the term “single purpose entity” shall mean a Person whose Organizational Documents contain, and who covenants that such Person shall comply or cause compliance with, provisions substantially similar to those set forth in this Section 3.1.24;
(y) has Organizational Documents that shall provide that Plymouth Industrial 20 Financial or the board of directors or managers of Borrower shall not take any action which, under the terms of any Organizational Documents (including, if applicable, any voting trust agreement with respect to any common stock), requires a unanimous vote of the board of directors or managers or the unanimous vote of the Plymouth Industrial 20 Financial and the Independent Managers of Borrower unless, at the time of such action, there shall be at least two (2) Independent Managers serving in such capacity (and such Independent Managers have participated in such vote). The Organizational Documents of Borrower shall provide that Borrower will not (and Borrower agrees that it will not), without the consent of each Independent Manager, (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 appointment of a receiver, liquidator or any similar official for Borrower or a substantial portion of its assets or properties, (iii) make a general assignment for the benefit of creditors, (iv) admit publicly or in writing to any creditor Borrower’s inability to pay its debts generally as they become due, (v) declare or effectuate a moratorium on the payment of any obligations, or (vi) take any action in furtherance of any of the foregoing. In addition, the Organizational Documents of Borrower shall provide that, when voting with respect to any of the matters set forth in the immediately preceding sentence of this Section 3.1.24(p), the Independent Managers shall consider only the interests of Borrower, including its creditors to the fullest extent permitted by law;
(z) if Borrower is a single member limited liability company, has Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding, upon the occurrence of any event that causes Plymouth Industrial 20 Financial to cease to be a member of Borrower (other than (i) upon an assignment by Plymouth Industrial 20 Financial of all of its limited liability company interests in Borrower and the admission of the transferee, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents, or (ii) the resignation of Plymouth Industrial 20 Financial and the admission of an additional member of Borrower, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents), each of the persons acting as an Independent Manager of Borrower shall, without any action of any Person and simultaneously with Plymouth Industrial 20 Financial ceasing to be a member of Borrower, automatically be admitted as a member of Borrower (a “Special Member”) and shall preserve and continue the existence of Borrower without dissolution. The Organizational Documents of Borrower shall further provide that for so long as any portion of the Debt is outstanding, no Special Member may resign or transfer its rights as a Special Member unless (A) a successor Special Member has been admitted to Borrower as a Special Member, and (B) such successor Special Member has also accepted its appointment as an Independent Manager of Borrower;
(aa) shall have Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding, except as expressly permitted pursuant to the terms of the Loan Documents, (i) Plymouth Industrial 20 Financial may not resign (unless it conveys its entire ownership interest in Borrower to TL Member (as hereinafter defined), and (ii) no additional member shall be admitted to Borrower;
(bb) shall have Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding: (i) 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 Borrower or the occurrence of any other event which terminates the continued membership of the last remaining member of Borrower in Borrower unless the business of 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 Borrower to cease to be a member of Borrower or that causes Plymouth Industrial 20 Financial to cease to be a member of Borrower (other than (A) upon an assignment by Plymouth Industrial 20 Financial of all of its limited liability company interests in Borrower and the admission of the transferee, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents, or (B) the resignation of Plymouth Industrial 20 Financial and the admission of an additional member of Borrower, if permitted pursuant to the Organizational Documents of 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 Borrower, agree in writing (1) to continue the existence of Borrower, and (2) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower, effective as of the occurrence of the event that terminated the continued membership of such member in Borrower; (iii) the bankruptcy of Plymouth Industrial 20 Financial or a Special Member shall not cause such Plymouth Industrial 20 Financial or Special Member to cease to be a member of Borrower and upon the occurrence of such event, the business of Borrower shall continue without dissolution; (iv) in the event of the dissolution of Borrower, Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of its assets and properties in an orderly manner), and its assets and properties 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 applicable law, each of Plymouth Industrial 20 Financial and Special Members shall irrevocably waive any right or power that they might have to cause Borrower or any of its assets or properties to be partitioned, to cause the appointment of a receiver for all or any portion of the assets or properties of Borrower, to compel any sale of all or any portion of the assets or properties of Borrower pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in e
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Plymouth Industrial REIT Inc.)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrowerthat, that as of the date hereof hereof, at all times prior hereto and until such time as the Obligations Debt shall be paid and performed in fullfull or its property is no longer subject to the Lien securing the Debt:
(ai) None of Borrowers owns or It has not owned and will not own any asset property or property any other assets other than (iA) its respective Property with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) incidental personal property necessary It was formed solely for the ownership or operation purpose of such Property.
(b) None of Borrowers engaging in, and has not engaged or and will not engage in in, any business other than the ownership, management leasing, management, financing and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.the Properties;
(ciii) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of any Borrowerits Affiliates (other than the Loan Documents and Operating Leases), any of its constituent party of any 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 armsarm’s-length basis with third parties other than any such party.parties;
(div) Such 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, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 Permitted Indebtedness. Except as set forth in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) daysimmediately preceding sentence, and (B) incurred in the ordinary course of business (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as "Permitted Indebtedness"). No Indebtedness no indebtedness other than the Debt may be secured (subordinate or pari passu) by any of Property and no indebtedness other than the Properties. Notwithstanding Debt and 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, indebtedness described in clauses (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 (ivvi) 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 definition of Permitted Indebtedness may be deemed to prohibit any indirect owner of any Borrower from incurring indebtedness; provided that any such indebtedness is not secured (subordinate or pari passu) by any direct interest in any of the Properties or any Borrower.personal property;
(ev) Such 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 has not and shall not acquire obligations or securities of its Affiliates.any Affiliate or constituent party or any Affiliate of any constituent party;
(fvi) Such Borrower It is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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) Such Borrower It has done or caused to be done, done and will do, 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 such Borrower it will not (i) terminate not, to the extent possible under applicable law, nor will it permit or fail suffer any constituent party to comply with the provisions of its organizational documents, 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 its operating agreement partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.a manner which would adversely affect its existence as a Single Purpose Entity;
(hviii) Such Borrower It has and will maintain separate books, books and records, financial statements and bank accounts separate and apart from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower Person and it will file its own tax returns (except to the extent such Borrower consolidation is required to file under GAAP, permitted for tax purposes or as a matter of law, provided that any tax returns) consolidated financial statements contain a note indicating that it and will not file a consolidated federal income tax return with its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.Person);
(iix) Such 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 such Borrower or any constituent party of such 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 limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(jx) Such Borrower It has maintained and intends to 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 such 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, consolidation, asset sale or merger, in whole or in part, of such Borrower.;
(lxii) Except as contemplated by this Agreement, wherein Borrowers are jointly and severally liable, and further, pursuant to the Clearing Account Agreement, such Borrower has It does not and will not commingle the its funds and other assets of such 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 Borrower and Operating Lessee in the Deposit Account, in the Holding Account, in the Tax and has held Insurance Escrow Account and will hold all in each of its assets in its own name.the other Reserve Accounts;
(mxiii) Such 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) Except in its capacity as contemplated by this Agreementa co-obligor under the Notes together with the other Borrowers, such Borrower has not and will not assume or guarantee or become obligated for the debts of any other Person and 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.;
(oxv) The organizational documents If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the “SPE Member”) whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower shall provide that the business and affairs of such Borrower or Operating Lessee shall be managed by or under deemed hereby to have made each of the direction of a board of one or more directors or managers designated by Sole representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the 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 the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors or board of managers, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (2) duly appointed individuals on 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 managers 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 Borrower (eachit, an "Independent Director") or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such Borrower who shall not have been at the time of such individual's appointment petition 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 receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member ceasing to be a member of such Borrower) while serving as an Independent Director, and may not have been at or 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 Borrower, any Affiliate of such Borrower or Operating Lessee or of any direct substantial part of its property, or indirect parent ordering the winding up or liquidation of such Borrowerits 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 any Independent Director serves in such capacity in without simultaneously replacing with another Independent Director of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) 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 of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by P▇▇▇▇▇▇ Coie LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate of such Borrower, (iii) a Person or other entity Controlling or under common Control constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with any such stockholder, partner, customer, supplier or other Person, or (iv) a member the funds of the immediate family 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;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) 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 stockholder, director, officer, employee, partner, customer, supplier Borrower or other PersonOperating 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. Each (a) Borrower hereby represents with respect to Borrower that it:
(i) is and warrants toalways has been duly formed, validly existing, and covenants within good standing in the state of its incorporation and in all other jurisdictions where it is qualified to do business;
(ii) has no judgments or, Lender except as set forth in the Title Insurance Policy, liens of any nature against it except for Tax liens not yet due;
(iii) is in compliance in all material respects with regard all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate;
(iv) is not involved in any material dispute with any taxing authority other than any disputes for taxes that are being contested in good faith and in compliance with the terms hereof by appropriate proceedings;
(v) except as set forth in the Title Insurance Policy, has paid all Taxes and Property Taxes which it owes except as permitted pursuant to this Agreement other than any Taxes and Property Taxes that are being contested in good faith and in compliance with the terms hereof by appropriate proceedings;
(vi) has never owned any real property other than the Property and Personal Property necessary or incidental to its ownership or operation of the Property and has never engaged in any business other than the ownership and operation of the Property;
(vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full;
(viii) subject to Section 3.1.10, has provided Agent with complete financial statements that reflect a fair and accurate view of the entity’s financial condition;
(ix) intentionally omitted; and
(x) has no material contingent or actual obligations not related to the Property.
(b) Borrower hereby represents from the date of such entity’s formation to the date of this Agreement that it:
(i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Party” and collectively, the “Related Parties”), except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party, except as may have been expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding;
(ii) has paid all of its debts and liabilities from its assets or such debts and liabilities have been repaid or discharged as of the date hereof;
(iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence;
(iv) except as expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding, has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person ;
(v) except as expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding, has not had its assets listed as assets on the financial statement of any other Person;
(vi) has been treated as a disregarded entity for U.S. federal income tax purposes;
(vii) has been, and at all times has held itself only out to the public as, a legal entity separate and distinct from any other Person other than for tax purposes (including any Affiliate or other Related Party);
(viii) has corrected any known misunderstanding regarding its status as a separate entity;
(ix) has conducted all of its business and held all of its assets in its own name, except as expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding;
(x) has not identified itself or any of its affiliates as a division or part of the other for non-tax purposes;
(xi) has maintained and utilized separate stationery, invoices and checks bearing its own name;
(xii) except as expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding, has not commingled its assets with those of any other Person and has held all of its assets in its own name;
(xiii) except as expressly permitted pursuant to the terms of the 2007 Hilton financing that is no longer outstanding and except for guarantees or obligations that have been released or discharged or that will be released or discharged on the Closing Date, has not guaranteed or become obligated for the debts of any other Person and has not held itself out as being responsible for the debts or obligations of any other Person;
(xiv) intentionally omitted;
(xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party;
(xvi) except pursuant to the 2007 Hilton financing which has been repaid or otherwise discharged, has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding;
(xvii) has maintained adequate capital in light of its contemplated business operations; provided, however, that the foregoing did not and shall not require any partners, members or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds; provided, however, that the foregoing did not and shall not require any partners, members or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(xix) has not owned any subsidiary or any equity interest in any other entity;
(xx) has not incurred any indebtedness that is still outstanding other than indebtedness that is permitted under the Loan Documents; and
(xxi) has not had any of its obligations guaranteed by an Affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or the Guaranty.
(c) Borrower hereby covenants that as of the date hereof and until such time as the Obligations Debt shall be paid and performed in full:
(ai) None of Borrowers owns or Borrower shall not own and will not own any asset or property other than (iA) its respective the Property and (iiB) incidental personal property Personal Property necessary for the ownership or operation of such the Property.;
(bii) None of Borrowers has engaged or will Borrower shall not engage in any business other than the ownership, management and operation of its respective the Property and each of Borrowers Borrower will conduct and operate its business as presently conducted and operated.;
(ciii) Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents and properly reflected on its books and records and except as permitted pursuant to Section 4.2.6 and for any Affiliate Contracts, Borrower has not entered and will shall 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 armsarm’s-length basis with third parties other than any such party.parties;
(div) Such Borrower has not incurred and will shall not incur any Indebtedness Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation) other than (iA) the DebtDebt (including any indemnification obligations which expressly survive the repayment of the Loan), and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in Permitted Debt and (C) such other liabilities that are permitted pursuant to the ordinary course terms of business (the Indebtedness described in Loan Documents; provided, however, 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 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 require any partners, members, or delayed, and if the Loan has been securitized, Borrowers shall obtain a "No Downgrade" letter other owners of Borrower to make (or restrict them from the Rating Agencies, (iiimaking) the holder of such Permitted Mezzanine Debt shall enter into an intercreditor agreement with Lender, reasonably satisfactory additional capital contributions 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.;
(ev) Such Borrower has not made and will shall 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) Such Borrower is and will shall 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.; provided, however, that the foregoing shall not require any partners, members, or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(gvii) Such Borrower has done or caused to be done, and will do, shall do all things necessary to observe organizational formalities and preserve its separate existence, and such Borrower shall not, nor will not (i) terminate or fail to comply with the provisions of its organizational documents, or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loan, the applicable Rating Agencies have issued a Rating Agency ConfirmationBorrower permit any constituent party to, amend, modify or otherwise change its the operating agreement or other organizational documents of Borrower without the prior consent of Agent in any material respectmanner that (A) violates the single purpose covenants set forth in this Section 3.1.23 or (B) amends, provided modifies or otherwise changes any provision thereof that by its terms cannot be modified at any amendment time when the Loan is outstanding or modification to provisions required to by its terms cannot be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.modified without Agent’s consent;
(hviii) Such Borrower will shall maintain separate all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Personconstituent party. 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 (A) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower. Such Borrower will file its own tax returns (’s assets and credit are not available to satisfy the extent debts and other obligations of such Borrower is required to file any tax returns) and will not file a consolidated federal income tax return with Affiliates or any other Person unless permitted or required by applicable law or requirement. Such and (B) such assets shall be listed on Borrower’s own separate balance sheet Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.;
(iix) Such Borrower will shall 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 and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks bearing its own name, except, in the case of each of the foregoing, for Tax purposes;
(jx) Such Borrower has maintained and intends to shall maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.; provided; however, that the foregoing shall not require any partners, members or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(kxi) Neither such Borrower nor any constituent party will shall seek or effect the liquidation, dissolution, winding up, consolidation, asset sale consolidation or merger, in whole or in part, of such Borrower.Borrower or transfer, sell or otherwise dispose of all or substantially all of its assets;
(lxii) Except as contemplated by this Agreementthe Loan Documents and Management Agreement with respect to Manager (but subject to Section 7.1 hereof), wherein Borrowers are jointly and severally liable, and further, pursuant to the Clearing Account Agreement, such Borrower has not and will shall 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.;
(mxiii) Such Borrower has and will shall 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 as contemplated by this Agreement, such Borrower has shall not and will not 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;
(xv) Except as contemplated by the Management Agreement, Borrower shall not permit any Affiliate or constituent party independent access to its bank accounts;
(xvi) 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; provided; however, that the foregoing shall not require any partners, members or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(xvii) 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; provided, however, that the foregoing shall not require any partners, members or other owners of Borrower to make (or restrict them from making) additional capital contributions to Borrower;
(xviii) Intentionally omitted;
(xix) Borrower shall allocate fairly and reasonably any overhead expenses that are shared with an affiliate, including for shared office space and for services performed by an employee of an affiliate;
(xx) Borrower shall not pledge its assets to secure the obligations of any other Person;
(xxi) Borrower shall not buy or hold evidence of Indebtedness issued by any other Person (other than cash or investment-grade securities);
(xxii) Borrower shall not form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity; and
(xxiii) Borrower shall not have any of its obligations guaranteed by an Affiliate; except as permitted by the Loan Documents with respect to the Guaranty.
(oi) The organizational documents of such If Borrower shall provide that the business and affairs 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”) shall be managed by a corporation owning at least a .0.10% general partnership or under the direction of a board of one or more directors or managers designated by Sole Membermembership interest, as applicable, 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 3.1.23 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.
(ii) If Borrower is a single member limited liability company, Borrower shall have 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, shall immediately become the sole member of Borrower, and the other of which shall become the sole member of Borrower if the first such springing member no longer is available to serve as such sole member.
(e) Borrower shall at all times cause there shall to be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Directors. The term “Independent Director"” means an individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of such employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Independent Directors, another nationally-recognized company reasonably approved by Agent, in each case that is not an Affiliate of Borrower who shall not have been at and that provides professional Independent Directors and other corporate services in the time ordinary course of such individual's appointment or at any time (except pursuant to its business, and which individual is duly appointed as 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) and is not, and has never been, and will not while serving as an 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 BorrowerDirector be, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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.following:
Appears in 1 contract
Single Purpose. Each (a) Borrower hereby represents with respect to Borrower that it:
(i) is and always has 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) except for Permitted Encumbrances (as detailed on Schedule VII attached hereto), has no judgments or liens of any nature against it except for tax liens not yet due;
(iii) is in material compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to operate;
(iv) is not involved in any dispute with any taxing authority;
(v) has paid all taxes which it owes;
(vi) has never owned any real property other than the Property and personal property necessary or incidental to its ownership or operation of the Property and has never engaged in any business other than the ownership and operation of the Property;
(vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full;
(viii) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition;
(ix) has obtained a current Phase I environmental site assessment (“ESA”) for the Property prepared by EBI Consulting and to Borrower’s best knowledge, the ESA has not identified any recognized environmental conditions that require further investigation or remediation; and
(x) has no material contingent or actual obligations not related to the Property.
(b) Borrower hereby represents and warrants to, to and covenants with, with Lender with regard to itself only and no other Borrower, that as of the date hereof and until such time as the Obligations debt shall be paid and performed in full:
(ai) None of Borrowers owns or Borrower does not own and will not own any asset or property other than (iA) its respective Property the Property, and (iiB) incidental personal property necessary for the ownership or operation of such the Property.
(bii) None of Borrowers has engaged or Borrower will not engage in any business other than the ownership, management and operation of its respective the Property and each of Borrowers Borrower will conduct and operate its business as presently conducted and operated.
(ciii) 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 armsarm’s-length basis with third parties other than any such party.
(div) Such Borrower has not incurred and will not incur incur, create or assume any Indebtedness other than (i) the Debt, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, amount not exceeding $5,000,000.00 in the aggregate 500,000 at any one time, and (iii) Indebtedness incurred in the financing of equipment and other personal property used on the Property with annual payments not exceeding $100,000 in the aggregate; provided that any Indebtedness incurred pursuant to subclause (ii) and (iii) shall be (x) (A) outstanding not more than with respect to subclause (ii), paid within sixty (60) daysdays of the date incurred, and (B) with respect to subclause (iii), paid when it is due and payable, and (y) incurred in the ordinary course of business (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as "Permitted Indebtedness")business. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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 BorrowerProperty.
(ev) 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 any obligations or securities of its Affiliates.
(fvi) 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.
(gvii) Such Borrower has done or caused to be done, and will do, do all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or fail not, nor will Borrower permit any constituent party to comply with the provisions of its organizational documents, 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 its the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any material respectmanner that (i) violates the single purpose covenants set forth in this Section 3.1.24, provided or (ii) amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any amendment time when the Loan is outstanding or modification to provisions required to by its terms cannot be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed materialmodified without Lender’s consent.
(hviii) Such Borrower will maintain separate all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any other Personconstituent party. 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 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 unless permitted or and will pay all of its own taxes as required by under applicable law or requirementlaw. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(iix) 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 and shall maintain and utilize separate stationery, invoices and checks bearing its own name.
(jx) Such Borrower has maintained and intends to 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 such Borrower nor any constituent party will engage in, seek or effect the liquidation, dissolution, winding up, consolidationliquidation, asset sale consolidation or merger, in whole or in part, or sale or transfer of such all or substantially all of the assets, of Borrower.
(lxii) 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.
(mxiii) 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.
(nxiv) Except as contemplated by this Agreement, such Borrower has not and will not 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 and will not pledge its assets for the benefit of any other Person.
(oA) The organizational documents of such If Borrower shall provide that the business and affairs 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”) shall be managed by either a corporation whose sole asset is its interest in Borrower, a single-member Delaware limited liability company or under the direction of a board of one or more directors or managers designated by Sole Membermulti-member Delaware limited liability company with two (2) springing members, and each such SPC Party will at all times there 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 be immediately appoint a new SPC Party whose articles of incorporation or limited liability company operating agreement 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.
(B) If Borrower is a single member limited liability company, Borrower 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, shall immediately become the sole member of Borrower, and the other of which shall become the sole member of Borrower if the first such springing member no longer is available to serve as such sole member.
(xvi) Borrower shall at all times cause there to be at least two duly appointed individuals on the board Independent Directors of directors or managers against each SPC Party and Borrower (each, an "reasonably satisfactory to Lender. “Independent Director") of such Borrower ” means a natural person who shall has 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 an Independent Directora director of such SPC Party and Borrower, and may not have been at any time during the five years preceding five (5) years such, appointment (i) a stockholder, ; director (other than as an Independent Director), officer, trustee, manager, member, employee, partner, attorney or counsel of such BorrowerSPC Party, Borrower or any Affiliate of such Borrower or any direct or indirect parent either of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrowerthem, (ii) a creditor, 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 such Borrowereither of them, (iii) a Person or other entity Controlling controlling or under common Control control with any such stockholder, partner, customer, supplier Person excluded from serving as Independent Director under clauses (i) or other Person(ii), or (iv) a member of the immediate family by blood or marriage of any such stockholderPerson excluded from serving as Independent Director under clause (i) or (ii). A natural person who satisfies the foregoing definition other than subparagraph (ii) shall not be disqualified from serving as an Independent Director of the SPC Party if such individual is an independent director provided by a nationally-recognized company that provides professional independent directors and that also provides other corporate services in the ordinary course of its business (a “Professional Independent Director”). A natural person who otherwise satisfies the foregoing definition other than subparagraph (i) by reason of being the independent director of a “special purpose entity” affiliated with the borrower shall not be disqualified from serving as an Independent Director of the SPC Party if either (x) such individual is a professional independent director or (y) the fees that such individual earns from serving as independent director of Affiliates of Borrower or the SPC Party in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for the year. Notwithstanding the immediately preceding sentence, directoran Independent Director may not simultaneously serve and Independent Director of Borrower or SPC Party and Independent Director of a special purpose entity that owns a direct or indirect equity interest in Borrower or SPC Party or a direct or indirect interest equity interest in any co-borrower of Borrower or SPC Party. For purposes of this paragraph, officer, employee, partner, customer, supplier or other Persona “special purpose entity” is an entity whose organizational documents contain restrictions on its activities substantially similar to those set forth in the SPC Party’s organizational documents.
Appears in 1 contract
Sources: Loan Agreement (Telx Group, Inc.)
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrowerthat, that as of the date hereof and until such time as the Obligations Indebtedness shall be paid and performed in full, except as otherwise provided herein, in the other Loan Documents or in the Consulting Agreement, the Borrower, and if Borrower is a limited partnership, the general partner of Borrower:
(ai) None of Borrowers owns or will does not own and shall not own any asset or property other than (i) the Property or, in the case of a general partner, its respective Property and interest in Borrower;
(ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers has is not engaged or will and shall not engage in any business other than those necessary for the ownership, use, management and or operation of its respective the Property and each of Borrowers will conduct and operate its any transactions entered into in connection with such 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 the general partner, other than any Affiliate of any constituent partysuch transactions embodied in the Loan Documents and the Consulting Agreement, except shall be entered into 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 an Affiliate of Borrower or such party.general partner;
(diii) Such Borrower has not incurred incurred, created or assumed any currently outstanding debt, and will shall not incur incur, create or assume any Indebtedness debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the DebtIndebtedness, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) indebtedness incurred in the ordinary course of the Borrower's or the general partner's business (including the Indebtedness described in the foregoing clauses (ifinancing of insurance premiums) and (ii) is referred to hereinthe Permitted Encumbrances, collectively, except as "Permitted Indebtedness"). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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 otherwise expressly permitted hereunder;
(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 any currently outstanding, and will shall not make any any, loans or advances to any third party (including any Affiliate of Borrower or constituent partysuch general partner), and has not ;
(v) is and shall not acquire securities of be solvent and paying 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 reasonable allocations of personnel and overhead expenses) from its assets as the same shall become due.;
(gvi) Such Borrower has done or caused to be done, done and will do, shall do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or fail to comply with the provisions of its organizational documentsshall not, or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loannor shall any general partner thereof, the applicable Rating Agencies have issued a Rating Agency Confirmationas applicable, amend, modify or otherwise change its operating agreement articles of incorporation or other organizational documents by-laws or partnership agreement, as applicable without the prior written consent of Lender, in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.its sole discretion;
(hvii) Such Borrower will shall observe all corporate or partnership formalities, as applicable, and conduct and operate its business as presently conducted and operated and in accordance with the assumptions set forth in the Non-Consolidation Opinion;
(viii) shall maintain separate books, records, financial statements books and records and bank accounts separate from those of its Affiliates and or any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower will file its own tax returns ;
(to the extent such Borrower is required to file any tax returnsix) and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.a separate business office at the Property;
(ix) Such Borrower will shall be, and at all times will shall hold itself out to the public as, a legal entity separate and distinct from any other entity (entity, including any Affiliate of such thereof, provided that Borrower or any constituent party of such Borrower), may identify its Property as associated with the applicable Franchisor;
(xi) shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in file its own name.tax returns, if required by the Code;
(jxii) Such Borrower has maintained and intends to shall 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.;
(kxiii) Neither such Borrower nor any constituent party will shall not seek or effect consent to the liquidation, dissolution, dissolution or winding up, consolidation, asset sale or merger, in whole or in part, of such Borrower.Borrower or the general partner, nor enter into any consolidation, merger, joint venture, syndication or other combination;
(lxiv) 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 shall not commingle the its 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.;
(mxv) 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 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.
(o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Membercaused, and at all times shall cause, there shall to be at least two (2) one duly appointed individuals on member of the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower or the general partner who shall has not have been at the time of such individual'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 an Independent Directorappointment, and may not have been at any time during the preceding five (5) two years (iA) a stockholderstockholder of, or an officer, director (other than as an with respect to such Independent Director)'s service as director of Borrower or the general partner) or employee of, officer, employee, partner, attorney or counsel of such Borrower, any Affiliate of such Borrower or any direct of its Affiliates, or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier general partner or other Person who derives any of its purchases Affiliates, (B) a customer or revenues from its activities with such supplier to Borrower or any Affiliate of such Borrowerits Affiliates, or to the general partner or any of its Affiliates, (iiiC) a Person person or other entity Controlling or under common Control with controlling any such stockholder, partner, customer, supplier or other Personcustomer, or (ivD) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or customer or any other director of Borrower or the general partner. As used in this subsection (dd), the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
(xvi) has not caused, and shall not cause, the board of directors of Borrower or the general partner to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to Borrower's common stock, requires the unanimous affirmative vote of one hundred percent (100%) of the members of the board of directors, unless at the time of such action there shall be at least one member who is an Independent Director;
(xvii) shall comply with the provisions of its articles of incorporation or by-laws or partnership agreement, as applicable; and
(xviii) shall use separate and distinct invoices and stationery and checks that indicate, by printed or typed identification, that Borrower is the entity for which payment is made.
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 Borrowerthat, that as of the date hereof and until such time as the Obligations Indebtedness shall be paid and performed in full, except as otherwise provided herein, in the other Loan Documents or in the Consulting Agreement, the Borrower, and if Borrower is a limited partnership, the general partner of Borrower:
(ai) None of Borrowers owns or will does not own and shall not own any asset or property other than (i) the Property or, in the case of a general partner, its respective Property and interest in Borrower;
(ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers has is not engaged or will and shall not engage in any business other than those necessary for the ownership, use, management and or operation of its respective the such Individual Property and each of Borrowers will conduct and operate its any transactions entered into in connection with such 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 the general partner, other than any Affiliate of any constituent partysuch transactions embodied in the Loan Documents and the Consulting Agreement, except shall be entered into 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 an Affiliate of Borrower or such party.general partner;
(diii) Such Borrower has not incurred incurred, created or assumed any currently outstanding debt, and will shall not incur incur, create or assume any Indebtedness debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the DebtIndebtedness, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) indebtedness incurred in the ordinary course of the Borrower's or the general partner's business (including the Indebtedness described in the foregoing clauses (ifinancing of insurance premiums) and (ii) is referred to hereinthe Permitted Encumbrances, collectively, except as "Permitted Indebtedness"). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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 otherwise expressly permitted hereunder;
(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 any currently outstanding, and will shall not make any any, loans or advances to any third party (including any Affiliate of Borrower or constituent partysuch general partner), and has not ;
(v) is and shall not acquire securities of be solvent and paying 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 reasonable allocations of personnel and overhead expenses) from its assets as the same shall become due.;
(gvi) Such Borrower has done or caused to be done, done and will do, shall do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or fail to comply with the provisions of its organizational documentsshall not, or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loannor shall any general partner thereof, the applicable Rating Agencies have issued a Rating Agency Confirmationas applicable, amend, modify or otherwise change its operating agreement articles of incorporation or other organizational documents by-laws or partnership agreement, as applicable without the prior written consent of Lender, in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.its sole discretion;
(hvii) Such Borrower will shall observe all corporate or partnership formalities, as applicable, and conduct and operate its business as presently conducted and operated;
(viii) shall maintain separate books, records, financial statements books and records and bank accounts separate from those of its Affiliates and or any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower will file its own tax returns ;
(to the extent such Borrower is required to file any tax returnsix) and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.a separate business office at the Property;
(ix) Such Borrower will shall be, and at all times will shall hold itself out to the public as, a legal entity separate and distinct from any other entity (entity, including any Affiliate of such thereof, provided that Borrower or any constituent party of such Borrower), may identify its Property as associated with the applicable Franchisor;
(xi) shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in file its own name.tax returns, if required by the Code;
(jxii) Such Borrower has maintained and intends to shall 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.;
(kxiii) Neither such Borrower nor any constituent party will shall not seek or effect consent to the liquidation, dissolution, dissolution or winding up, consolidation, asset sale or merger, in whole or in part, of such Borrower.Borrower or the general partner, nor enter into any consolidation, merger, joint venture, syndication or other combination;
(lxiv) 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 shall not commingle the its 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.;
(mxv) 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 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.
(o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Membercaused, and at all times shall cause, there shall to be at least two (2) one duly appointed individuals on member of the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower or the general partner who shall has not have been at the time of such individual'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 an Independent Directorappointment, and may not have been at any time during the preceding five (5) two years (iA) a stockholderstockholder of, or an officer, director (other than as an with respect to such Independent Director)'s service as director of Borrower or the general partner) or employee of, officer, employee, partner, attorney or counsel of such Borrower, any Affiliate of such Borrower or any direct of its Affiliates, or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier general partner or other Person who derives any of its purchases Affiliates, (B) a customer or revenues from its activities with such supplier to Borrower or any Affiliate of such Borrowerits Affiliates, or to the general partner or any of its Affiliates, (iiiC) a Person person or other entity Controlling or under common Control with controlling any such stockholder, partner, customer, supplier or other Personcustomer, or (ivD) a member of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or customer or any other director of Borrower or the general partner. As used in this subsection (dd), the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
(xvi) has not caused, and shall not cause, the board of directors of Borrower or the general partner to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to Borrower's common stock, requires the unanimous affirmative vote of one hundred percent (100%) of the members of the board of directors, unless at the time of such action there shall be at least one member who is an Independent Director;
(xvii) shall comply with the provisions of its articles of incorporation or by-laws or partnership agreement, as applicable; and
(xviii) shall use separate and distinct invoices and stationery and checks that indicate, by printed or typed identification, that Borrower is the entity for which payment is made.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrowerthat, that as of the date hereof hereof, at all times prior hereto and until such time as the Obligations Debt shall be paid and performed in fullfull or its property is no longer subject to the Lien securing the Debt:
(ai) None of Borrowers owns or It has not owned and will not own any asset property or property any other assets other than (iA) its respective Property with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) incidental personal property necessary It was formed solely for the ownership or operation purpose of such Property.
(b) None of Borrowers engaging in, and has not engaged or and will not engage in in, any business other than the ownership, management leasing, management, financing and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.the Properties;
(ciii) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of any Borrowerits Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent party of any 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 armsarm's-length basis with third parties other than any such party.parties;
(div) Such 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, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 Permitted Indebtedness. Except as set forth in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) daysimmediately preceding sentence, and (B) incurred in the ordinary course of business (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as "Permitted Indebtedness"). No Indebtedness no indebtedness other than the Debt may be secured (subordinate or pari passu) by any of Property and no indebtedness other than the Properties. Notwithstanding Debt and 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, indebtedness described in clauses (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 (ivvi) 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 definition of Permitted Indebtedness may be deemed to prohibit any indirect owner of any Borrower from incurring indebtedness; provided that any such indebtedness is not secured (subordinate or pari passu) by any direct interest in any of the Properties or any Borrower.personal property;
(ev) Such 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 has not and shall not acquire obligations or securities of its Affiliates.any Affiliate or constituent party or any Affiliate of any constituent party;
(fvi) Such Borrower It is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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) Such Borrower It has done or caused to be done, done and will do, 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 such Borrower it will not (i) terminate not, nor will it permit or fail suffer any constituent party to comply with the provisions of its organizational documents, 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 its operating agreement partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.a manner which would adversely affect its existence as a Single Purpose Entity;
(hviii) Such Borrower It has and will maintain separate books, books and records, financial statements and bank accounts separate and apart from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower Person and it will file its own tax returns (except to the extent such Borrower consolidation is required to file under GAAP, permitted for tax purposes or as a matter of law, provided that any tax returns) consolidated financial statements contain a note indicating that it and will not file a consolidated federal income tax return with its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.Person);
(iix) Such 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 such Borrower or any constituent party of such 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 limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(jx) Such Borrower It has maintained and intends to 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 such 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, consolidation, asset sale or merger, in whole or in part, of such Borrower.;
(lxii) Except as contemplated by this Agreement, wherein Borrowers are jointly and severally liable, and further, pursuant to the Clearing Account Agreement, such Borrower has It does not and will not commingle the its funds and other assets of such 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 has held Insurance Escrow Account and will hold all in each of its assets in its own name.the other Reserve Accounts;
(mxiii) Such 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) Except in its capacity as contemplated by this Agreementa co-obligor under the Notes together with the other Borrowers, such Borrower has not and will not assume or guarantee 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.;
(oxv) The organizational documents If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower shall provide that the business and affairs of such Borrower or Operating Lessee shall be managed by or under deemed hereby to have made each of the direction of a board of one or more directors or managers designated by Sole representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times 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 the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (2) duly appointed individuals on 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 managers 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 Borrower (eachit, an "Independent Director") or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such Borrower who shall not have been at the time of such individual's appointment petition 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 receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member ceasing to be a member of such Borrower) while serving as an Independent Director, and may not have been at or 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 Borrower, any Affiliate of such Borrower or Operating Lessee or of any direct substantial part of their property, or indirect parent ordering the winding up or liquidation of such Borrowerits 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 serves in such capacity in 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;
(xvii) 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 of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate of such Borrower, (iii) a Person or other entity Controlling or under common Control constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with any such stockholder, partner, customer, supplier or other Person, or (iv) a member the funds of the immediate family 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;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) 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 stockholder, director, officer, employee, partner, customer, supplier Borrower or other PersonOperating 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. 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 Obligations shall be paid and performed in full:
(a) None of Borrowers owns not have or will own create any asset or property subsidiaries other than (i) its respective Property and (ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers has engaged or will pursuant to a Permitted Reorganization. The General Partner shall not engage in any business or operate for any purpose other than as a general or limited partner of the ownership, management and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.
Borrower (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 arms-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 in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause the General Partner may hold assets permitted by the proviso following clause (iixiii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in of the ordinary course definition of business (the Indebtedness described in the foregoing clauses (i"Single Purpose") and (ii) is referred to herein, collectively, as "Permitted Indebtedness"). No Indebtedness other than the Debt may shall at all times be secured (subordinate or pari passu) by any of the 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 Datea Single Purpose entity; 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 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, and will do, all things necessary to observe organizational formalities and preserve its existence, and such Borrower will not (i) terminate or fail to comply with the provisions of its organizational documents, 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 its operating agreement or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.
(h) Such Borrower will maintain separate books, records, financial statements and bank accounts from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that it is understood that, notwithstanding the provisions of clauses (ii), (iii), (v) and (vi) of the definition of "Single Purpose" contained herein (as such clauses relate to the period from the date of formation of the General Partner and the Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated , as applicable, to the date hereof), (A) separate financial statements for the General Partner have not heretofore been produced on a regular basis, but the financial records of the General Partner have been and will remain adequate to indicate the separateness permit production of such Borrower. Such Borrower separate financial statements (including balance sheets and statements of income and changes in financial position) for past periods if it hereafter becomes necessary to produce such financial statements, and separate financial statements for the General Partner will file hereafter be prepared on an annual basis; (B) because of the limited nature of the General Partner's operations it has not at all times heretofore maintained separate deposit accounts in its own tax returns (to the extent such Borrower is required to file any tax returns) name, but it has recently established and will maintain such accounts, consistent with the covenants contained in Section 5.10(i) hereof; (C) certain transaction and overhead costs incurred by the Borrower, the General Partner and/or Host Marriott may not file heretofore have been allocated, but such costs hereafter will be fairly allocated; (D) except for (1) obligations of the Borrower for which it is liable in its capacity as General Partner and (2) any accrued obligations to Affiliates in connection with the allocation of costs for shared overhead and office expenses, the General Partner neither has nor expects to have any debt obligations, and (E) prior to 1989, the Borrower was not able to make all payments required under the Bank Debt as they became due, and the Borrower incurred approximately $13 million in liability to Host Marriott in connection with (or in lieu of) advances by Host Marriott under a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirementguaranty of the Bank Debt, for which the Borrower remains liable and which constitutes Permitted Debt of the kind referred to in clause (iv) of the definition of that term herein. Such Neither Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
nor the General Partner will: (i) Such Borrower will beseek or consent to any dissolution, and at winding up, liquidation, consolidation, merger or sale of all times will hold itself out or substantially all of its assets; (ii) fail 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 identity; (iii) commingle its own name.
(j) Such Borrower 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 funds or effect the liquidation, dissolution, winding up, 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.
Person (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 except as specifically contemplated by this Agreement, such Borrower has not and will not the Cash Management Procedures); (iv) assume or guarantee or become obligated for the debts of any other Person and does not and will not or hold itself out to be responsible for or have its credit as being available to satisfy the debts or obligations of any other Person.
Person (oother than as permitted by the Loan Documents); (v) The organizational documents acquire obligations or securities of such its partners or shareholders, as the case may be; (vi) pledge any of its assets for the benefit of any other Person other than the Lender (except for purchase money security interests or as otherwise permitted by the Loan Documents); (vii) make any loans to any other Person (except advances of Permitted Debt by the General Partner or its Affiliates to the Borrower); (viii) identify its partners or shareholders, as the case may be, or any of its Affiliates as a division or part of it (except for inclusion of the Borrower shall provide that and the General Partner in consolidated financial statements of Host Marriott); (ix) engage (either as transferor or transferee) in any material transaction with any Affiliate other than for fair value and on terms similar to those obtainable in arms-length transactions with unaffiliated parties, or engage in any transaction with any Affiliate involving any intent to hinder, delay or defraud any entity; (x) engage in any business activity or operate for any purpose other than as stated in Section 2.03 of its Partnership Agreement and affairs Article THIRD of such Borrower shall be managed by the GP Certificate, as applicable, in each case as in effect on the date hereof or under (xi) without the direction consent of a board of one or more all its directors or managers designated by Sole Memberall the directors of its General Partner, and at all times there shall be at least two (2) duly appointed individuals on as applicable, including the board consent of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an Independent Director, and may file a bankruptcy or insolvency petition or otherwise institute bankruptcy proceedings. Borrower will not have been at acquire 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except assets not related to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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 business and operation of the immediate family of any such stockholder, director, officer, employee, partner, customer, supplier or other PersonHotels.
Appears in 1 contract
Sources: Loan Agreement (Courtyard by Marriott Limited Partnership)
Single Purpose. Each (a) Borrower hereby represents and warrants to, and covenants withthat, Lender once the date of Borrower’s formation and until the date hereof, Borrower has operated as a single purpose entity and has complied with regard to itself only all provisions of Borrower’s limited liability company operating agreement, including, without limitation, the special purpose provisions contained in Section 9(j) of such agreement.
(b) Borrower hereby represents and no other Borrowerwarrants, that and covenants that, as of the date hereof and until such time as the Obligations Debt shall be paid and performed in full, Borrower, Mortgage Borrower and First Mezzanine Borrower:
(ai) None of Borrowers owns or do not own and will not own any asset or property other than (i) operation of its respective Property and property or its ownership interests in Mortgage Borrower or First Mezzanine Borrower or the Property, as applicable;
(ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers has engaged or do not and will not engage in any business other than the ownershipownership of the Collateral, management the First Mezzanine Collateral or the Property, as applicable, and operation of its respective Property and each of Borrowers will conduct and operate its business as presently proposed to be conducted and operated., subject to expanded operations and management in connection with the Condominium Documents;
(ciii) except for capital contributions and capital distributions permitted under the terms of this Agreement and properly reflected on the books of records of Borrower, First Mezzanine Borrower has and/or Mortgage Borrower and, with respect to Mortgage Borrower, the Heritage Intercompany Loan, the Development Fee, and the Deferred -49- Development Fee, have not entered and will not enter into any contract or agreement with any Affiliate of any BorrowerAffiliate, 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 armsarm’s-length basis with third parties other than any such party.;
(div) Such Borrower has have 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 DebtLoan, with respect to Borrower, the First Mezzanine Loan, with respect to First Mezzanine Borrower, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amountthe Mortgage Loan, including such trade payables and debt of any other with respect to Mortgage Borrower, (B) with respect to Mortgage Borrower, the Heritage Intercompany Loan and (C) liabilities incurred in the ordinary course of Borrower’s business in amounts not exceeding $5,000,000.00 to exceed in the aggregate at any one time; provided that any Indebtedness $2,000,000.00, (when combined with liabilities of Mortgage Borrower and Second Mezzanine Borrower incurred pursuant to subclause (ii) shall be (A) outstanding in the ordinary course of their respective businesses), which liabilities are not more than sixty (60) daysdays past the date incurred, are not evidenced by a note and (B) incurred in the ordinary course of business (the Indebtedness described in the foregoing clauses (i) are paid when due; and (ii) is referred to herein, collectively, as "Permitted Indebtedness"). No no Indebtedness other than the Debt may be secured (subordinate subordinate, pari passu or pari passuotherwise) by any of the Properties. Notwithstanding Collateral, the foregoingFirst Mezzanine Collateral or the Property, 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.applicable;
(ev) Such Borrower has have 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) Such Borrower is are 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 their respective assets as the same shall become due.;
(gvii) Such Borrower has have done or have caused to be done, done and will do, do all things necessary to observe organizational formalities and preserve its each of their existence, and such Borrower will not (i) terminate or fail to comply with the provisions of its organizational documentsnot, or (ii) unless (A) Lender has consented and (B) following a Securitization of the Loan, the applicable Rating Agencies have issued a Rating Agency Confirmationnor will permit any constituent party to, amend, modify or otherwise change its the partnership certificate, partnership agreement, articles of incorporation and bylaws, certificate of formation, operating agreement or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.of such constituent party without the prior consent of Lender;
(hviii) Such Borrower will maintain separate all of its books, records, financial statements and bank accounts as official records, separate from those of its Affiliates and any other Person. Such Borrower's assets constituent party and will not permit its assets to be listed as assets on the financial statement of any other Person, entity; provided, however, that such Borrower's ’s, Mortgage Borrower’s and First Mezzanine Borrower’s assets may be included in a consolidated financial statement of its Affiliates Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower, Mortgage Borrower and/or First Mezzanine Borrower from such Affiliate and to indicate that Borrower. Such Borrower will file its own tax returns (’s, Mortgage Borrower’s and/or First Mezzanine Borrower’s assets and credit, as applicable, are not available to satisfy the extent debts and other obligations of such Borrower is required to file any tax returns) and will not file a consolidated federal income tax return with Affiliate or any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and (b) such assets shall maintain its booksalso be listed on the Borrower’s, records, resolutions and agreements as official records.Mortgage Borrower’s and/or First Mezzanine Borrower’s own separate balance sheet;
(iix) Such Borrower will be, and at all times will hold itself themselves out to the public as, a legal entity entities separate and distinct from any other entity (including any Affiliate of such Borrower or any constituent party of such Borrowerparty), shall correct any known misunderstanding regarding its their status as a separate entityentities, shall conduct business in its their own name., shall not identify themselves or any of their Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks bearing their own name;
(jx) Such Borrower has maintained and intends to will maintain adequate capital and a sufficient number of employees for the normal obligations reasonably foreseeable in a business of its their respective size and character and in light of its their respective contemplated business operations.;
(kxi) Neither such Borrower will not seek or effect nor permit any constituent party will to seek or effect the liquidation, dissolution, winding up, consolidationliquidation, asset sale consolidation or merger, in whole or in part, of such Borrower.any of them;
(lxii) 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 their respective 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 their respective assets in its own name.;
(mxiii) Such Borrower has and will maintain its their respective assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its their respective individual assets from those of any Affiliate or constituent party or any other Person.;
(nxiv) Except as contemplated by this Agreement, such Borrower has not and will not assume or guarantee or become obligated for the debts of any other Person and does not and will not hold itself themselves out to be responsible for or have its their respective credit available to satisfy the debts or obligations of any other Person;
(xv) will not permit any Affiliate or constituent party independent access to their respective bank accounts;
(xvi) if they respectively employ any employees of their own, will pay the salaries of any such employees from their own respective funds;
(xvii) will compensate each of their own consultants and agents from their funds for services provided to them and pay from their own assets all obligations of any kind incurred, including shared overhead expenses;
(xviii) will not pledge each of their assets to secure the obligations of any other Person;
(xix) will not form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity other than, with respect to Borrower, First Mezzanine Borrower or Mortgage Borrower;
(xx) will allocate fairly and reasonably any overhead expenses that are shared with any affiliate, including for shared office space and for services performed by any employee of an affiliate;
(xxi) will file their own respective tax returns, except to the extent Borrower, Mortgage Borrower or First Mezzanine Borrower is a “disregarded entity” for tax purposes;
(xxii) will cause the managers, agents and other representatives of the Borrower, First Mezzanine Borrower and/or Mortgage Borrower, as applicable to act at all times with respect to the First Mezzanine Borrower, Mortgage Borrower and/or Borrower, as applicable in furtherance of the foregoing and in the best interests of the Borrower, First Mezzanine Borrower and Mortgage Borrower; and
(xxiii) will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).
(oi) The organizational documents of such If Borrower shall provide that the business and affairs 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”) shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, corporation 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 is a single member Delaware limited liability company, Borrower shall have at least two springing members, each of which, upon the dissolution of such sole member or the withdrawal or the disassociation of the sole member from Borrower, shall immediately become a member of Borrower.
(d) Borrower shall at all times cause there shall to be at least two one (21) duly appointed individuals on member of the board of directors or independent managers against Borrower who is provided by a nationally recognized company that provides professional independent directors (each, an "“Independent Director"”) and professional independent managers (each, an “Independent Manager”) of Borrower or any such Borrower SPC Party 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 an Independent Directora director of such SPC Party or Borrower, 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, member, trustee, employee, partner, attorney or counsel of such BorrowerSPC Party, Borrower or any Affiliate of such Borrower or any direct or indirect parent either of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrowerthem, (ii) a creditor, 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 such Borrowereither of them, (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 by blood or marriage of any such stockholder, director, officer, member, trustee, employee, partner, creditor, customer, supplier or -52- other Person. 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.
(e) 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 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.
Appears in 1 contract
Sources: Second Mezzanine Loan Agreement
Single Purpose. Each Borrower ENTITY Seller hereby represents and warrants to, to Buyer and covenants withwith Buyer that, Lender with regard to itself only on and no other Borrower, that as of the date hereof of this Agreement and until such time as the each Purchase Date and at all times while this Agreement and any Transaction hereunder is in effect or any Repurchase Obligations shall be paid and performed in full:
remain outstanding: (a) None of Borrowers owns or will own any asset or property other than (i) its respective Property it is and (ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers has engaged or will engage in any business other than the ownership, management and operation of its respective Property and 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 intends to those that would be available on an arms-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 Debtremain solvent, and (ii) unsecured trade payables it has paid and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (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 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 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 own assets as the same shall become due.
; LEGAL_US_E # 179498015.2179498015.6 52 (gb) Such Borrower it has complied and will comply with the provisions of its certificate of formation and its limited liability company agreement; (c) it has done or caused to be done, done and will do, do all things necessary to observe organizational limited liability company formalities and to preserve its existence, ; (d) it has maintained and such Borrower will not (i) terminate or fail to comply with the provisions maintain all of its organizational documents, 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 its operating agreement or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.
(h) Such Borrower will maintain separate books, records, financial statements records and bank accounts separate from those of its Affiliates affiliates, its members and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower and it will file its own tax returns (except to the extent such Borrower consolidation is required to file any tax returnsor permitted under GAAP or as a matter of law); (e) it has been, is and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such 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)entity, it shall correct any known misunderstanding regarding its status as a separate entity, it shall conduct business in its own name.
, it shall not identify itself or any of its Affiliates as a division or part of the other; (f) it has not owned and will not own any property or any other assets other than the Purchased Assets, cash and its interest under any associated Hedging Transactions; (g) it has not engaged and will not engage in any business other than the origination, acquisition, ownership, financing and disposition of the Purchased Assets and the associated Hedging Transactions in accordance with the applicable provisions of the Transaction Documents; (h) it has not entered into, and will not enter into, any contract or agreement with any of its affiliates, 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 Persons other than such affiliate; (i) it has not incurred and will not incur any indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) obligations under the Transaction Documents, (B) obligations under the documents evidencing the Purchased Assets, and (C) unsecured trade payables, in an aggregate amount not to exceed $200,000 at any one time outstanding, incurred in the ordinary course of acquiring, owning, financing and disposing of the Purchased Assets; provided, however, that any such trade payables incurred by Seller shall be paid within sixty (60) days of the date incurred; (j) Such Borrower it has maintained not made and intends will not make any loans or advances to any other Person, and shall not acquire obligations or securities of any member or affiliate of any member or any other Person (other than in connection with the origination or acquisition of Purchased Assets); (k) it 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.
; (kl) Neither such Borrower nor any constituent party it will not seek or effect the liquidation, dissolution, liquidation or winding up, consolidation, asset sale or merger, in whole or in part, part of such Borrower.
Seller; (lm) 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 it will not commingle the its funds and other assets of such Borrower with those of any Affiliate or constituent party of its Affiliates or any other Person, and ; (n) it has held and will hold all of its assets in its own name.
(m) Such Borrower 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 of its Affiliates or any other Person.
(n) Except as contemplated by this Agreement, such Borrower has not and will not 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.
(o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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.;
Appears in 1 contract
Sources: Master Repurchase and Securities Contract Agreement (Granite Point Mortgage Trust Inc.)
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 Obligations Debt shall be paid and performed in full:
(a) None of Borrowers owns or Borrower does not own and will not own any asset or property other than (i) its respective Property the Property, and (ii) incidental personal property necessary for the ownership or operation of such the Property.
(b) None of Borrowers Borrower has engaged or not and will not engage in any business other than the ownership, management and operation of its respective the Property and each of Borrowers Borrower has and 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 arms-length basis with third parties other than any such party.
(d) Such 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, (B) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (ii1) unsecured trade payables and short term operational debt unsecured, (2) not evidenced by a note note, (3) on commercially reasonable terms and in an aggregate amountconditions, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii4) shall be (A) outstanding due not more than sixty (60) daysdays past the date incurred and paid on or prior to such date, and and/or (BC) incurred in Permitted Equipment Leases; provided however, the ordinary course aggregate amount of business (the Indebtedness indebtedness described in the foregoing clauses ffil and .g shall not exceed at any time two percent (i2%) 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 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 outstanding principal amount 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 has been, is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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.
(g) Such Borrower has done or caused to be done, done and will do, do or cause to be done all things necessary to observe organizational formalities and preserve its existence, and such Borrower has not, will not (i) terminate or fail not, nor will Borrower permit any constituent party to comply with the provisions of its organizational documents, 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 its the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement agreement, trust or other organizational documents of Borrower or such constituent party without the prior consent of Lender in any material respect, provided manner that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.
(h) Such Borrower will maintain separate books, records, financial statements and bank accounts from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower will file its own tax returns (to the extent such Borrower is required to file any tax returns) and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Such Borrower will beviolates the single purpose covenants set forth in this Section 3.1.24, 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.
(j) Such Borrower 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, 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 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.
(o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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.or
Appears in 1 contract
Sources: Loan Agreement (Hartman Short Term Income Properties XX, Inc.)
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrowerthat, that as of the date hereof and until such time as the Obligations Debt shall be paid and performed in fullfull or its property is no longer subject to the Lien securing the Debt:
(a) None of Borrowers owns or It has not owned and will not own any asset property or property any other assets other than (iA) its respective the Property currently owned by it, and (iiB) incidental personal and intangible property necessary for relating to the ownership or operation of such the Property.;
(b) None It was formed solely for the purpose of Borrowers engaging in, and has not engaged or and will not engage in in, any business other than the ownership, management management, financing and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.the Property;
(c) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of any Borrowerits Affiliates, any of its constituent party of any 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 armsarm’s-length basis with third parties other than any such party.parties;
(d) Such Borrower It 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 (i) the Debt, Permitted Indebtedness. No indebtedness other than the Debt and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (the Indebtedness indebtedness described in the foregoing clauses (iclauses(v) and (iivi) is referred to herein, collectively, as "of the definition of Permitted Indebtedness"). No Indebtedness may be secured (subordinate or pari passu) by the Property and no indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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.personal property;
(e) Such Borrower Other than as provided in the Loan Documents, it has not made and will not make any loans or advances to to, and it has not pledged its assets and 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 has not and shall not acquire obligations or securities of its Affiliates.any Affiliate or constituent party or any Affiliate of any constituent party;
(f) Such Borrower It is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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.;
(g) Such Borrower It has done or caused to be done, done and will do, do all things necessary to observe organizational formalities limited liability company laws, as the case may be, and preserve its existence, and such Borrower it will not (i) terminate not, nor will it permit or fail suffer any constituent party to comply with the provisions of its organizational documents, 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 its partnership certificate, partnership agreement, certificate of formation, operating agreement agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.a manner which would adversely affect its existence as a Single Purpose Entity;
(h) Such Borrower It will maintain separate books, books and records, financial statements and bank accounts separate and apart from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower Person and it will file its own tax returns (except to the extent such Borrower consolidation is required to file under GAAP, permitted for tax purposes or as a matter of law, provided that any tax returns) consolidated financial statements contain a note indicating that it and will not file a consolidated federal income tax return with its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.Person);
(i) Such Borrower It will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any of its Affiliates, any of its constituent parties or any Affiliate of such Borrower or any constituent party of such Borrowerparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name., shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, 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 limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(j) Such Borrower has maintained and intends to It 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 such Borrower it nor any constituent party will seek Borrower’s dissolution or effect the liquidation, dissolution, winding up, 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 It will not commingle the its funds and other assets of such Borrower with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person, and has held and will hold all of its assets in its own name.;
(m) Such 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.;
(n) Except as contemplated by this Agreement, such Borrower It has not and will not assume or guarantee or become obligated for the debts of any other Person and does not held 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 will not guarantee or otherwise become liable for, the debts debts, securities or obligations of any other Person.;
(o) The organizational documents If it is a limited liability company, (a) within thirty (30) days after the Closing Date either at least one of such its members shall be a Single Purpose Entity (the “SPE Member”) that is a corporation whose sole assets are its interest in the Borrower shall provide and that has no less than a one percent (1%) membership interest in the business Borrower, and affairs of such Borrower shall be managed by or under deemed hereby to have made each of the direction of a board of one or more directors or managers designated by Sole representations, warranties and covenants contained in this Section 4.1.28 with respect to the SPE Member, and at all times there the SPE Member shall be at least have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors) as a duly appointed individuals on the member of its board of directors or managers against Borrower managers, as applicable, or (eachb) subject to the following sentence, an "it shall have one (1) Independent Director"Director (or, if required in connection with a Securitization, two (2) of such Borrower who shall not have been at the time of such individual's appointment or at any time (except pursuant to an express provision Independent Directors) as a non economic member in such Borrower's operating agreement providing limited liability company or if such limited liability company is managed by a board of managers or a board of directors, as a duly appointed member of its board of managers or board of directors, as applicable. Borrower shall have a period of thirty (30) days following the Closing Date to file all necessary applications with the Gaming Authorities in order to appoint an Independent Director to its board of managers or board of directors, as applicable, provided, Borrower and its members shall have taken or caused to be taken all other actions required for the appointment of such Independent Director to become a "special member" upon Sole Member ceasing its board of managers or board of directors, as applicable, and Borrower shall diligently continue to be a member obtain any required approvals from the Gaming Authority with respect to the appointment of such BorrowerIndependent Director;
(p) while serving It shall, at all times, have an operating agreement which provides that, for so long as the Loan is outstanding, its board of directors (or (a) if Borrower is a limited liability company with an SPE Member, the board of directors of the SPE Member or (b) if Borrower is a limited liability company with one (1) (or if required in connection with a Securitization, two (2)) non-economic member as Independent Director, and may each of its members (including the non-economic member)) will not have been be permitted to take any action which, under applicable law or the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least one member (or if required in connection with a Securitization, two members) (including, if applicable, the non-economic members) who are Independent Directors; provided, however, that, subject to any time during applicable Legal Requirement, its board of directors (or if Borrower is a limited liability company with an SPE Member, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding five (5) years (i) a stockholder, director (clause of this sentence other than as an Independent Director)the following actions: (A) dissolve or liquidate, officerin 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; (C) engage in any business other than the ownership, employeemaintenance and operation of the Property or, partner, attorney or counsel of such Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except with respect to the extent such Independent Director serves in such capacity in respect of any other BorrowerSPE Member, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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) acting as a member of the immediate family Borrower; (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 stockholderpetition or to the appointment of a receiver, directorrehabilitator, officerconservator, employeeliquidator, partnerassignee, customertrustee, supplier custodian or sequestrator (or other Personsimilar official) of its SPE Member or the Borrower or of any substantial part of its 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) amend its SPE Member’s certificate of incorporation or the operating agreement of the Borrower; (F) enter into any transaction with an Affiliate not in the ordinary course of the Borrower’s business; or (G) withdraw the SPE Member or the non-economic members who are Independent Directors of the Borrower. With respect to a limited liability company with one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors) as a non-economic member, the affirmative consent of each Independent Director shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable). With respect to a limited liability company with an SPE Member, the affirmative consent of all of the members of such limited liability company, including the SPE Member shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable);
(q) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Property;
(r) Borrower shall conduct its business so that the assumptions made with respect to Borrower in that certain opinion letter dated the date hereof addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(s) Borrower will not permit any Affiliate or constituent party independent access to its bank accounts;
(t) Borrower shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees 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. Upon the withdrawal or the disassociation of any Independent Director from any constituent entity of Borrower (or from Borrower directly), Borrower 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;
(v) Borrower 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; and
(w) Borrower will observe all applicable limited liability company formalities in all material respects.
Appears in 1 contract
Sources: Loan Agreement (Colony Resorts LVH Acquisitions LLC)
Single Purpose. Each Borrower Member hereby represents and warrants to, and covenants with, Lender with regard to itself only and no other Borrowerthat, that as of the date hereof and until such time as the Obligations Debt shall be paid and performed in full:
(ai) None of Borrowers owns or It has not owned and will not own any asset property or property any other assets other than (iA) its respective Property membership interest in a Borrower, and (B) incidental personal and intangible property relating to the ownership of such membership interest;
(ii) incidental personal property necessary for the ownership or operation of such Property.
(b) None of Borrowers It has not engaged or and will not engage in any business other than the ownership, management and operation ownership of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.a membership interest in a Borrower;
(ciii) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of any Borrowerits Affiliates, any of its constituent party of any Borrower parties 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 armsarm's-length basis with third parties other than any such party.parties;
(div) Such Borrower It has not incurred and will not incur any Indebtedness other than indebtedness, secured or unsecured, direct or indirect, absolute or contingent (i) the Debt, and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of guaranteeing any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (the Indebtedness described in the foregoing clauses (i) and (ii) is referred to herein, collectively, as "Permitted Indebtedness"obligation). No Indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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.;
(ev) Such Borrower It has not made and will not make any loans or advances to any third party other Person (including any Affiliate or constituent partymember or any Affiliate of any member), and has not and shall not acquire obligations or securities of its Affiliates.any Affiliate or member or any Affiliate of any member;
(fvi) Such Borrower It is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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) Such Borrower It has done or caused to be done, done and will do, do all things necessary to observe organizational formalities corporate, partnership or limited liability company formalities, as the case may be, and preserve its existence, and such Borrower it will not (i) terminate not, nor will it permit or fail suffer any constituent party to comply with the provisions of its organizational documents, 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 its partnership certificate, partnership agreement, operating agreement agreement, articles of incorporation and bylaws, trust or other organizational documents in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.
(h) Such Borrower will maintain separate books, records, financial statements and bank accounts from those of its Affiliates and any other Person. Such Borrower's assets will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included constituent party in a consolidated financial statement of manner which would adversely affect its Affiliates provided that appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower. Such Borrower will file its own tax returns (to the extent such Borrower is required to file any tax returns) and will not file a consolidated federal income tax return with any other Person unless permitted or required by applicable law or requirement. Such 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 existence as a separate entity, shall conduct business in its own name.
(j) Such Borrower 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, 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 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.
(o) The organizational documents of such Borrower shall provide that the business and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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.Single Purpose Entity;
Appears in 1 contract
Sources: Loan Agreement (Starwood Hotel & Resorts Worldwide Inc)
Single Purpose. Each Borrower hereby represents and warrants to, and covenants with, Lender with regard to itself only that, since its date of formation and no other Borrower, that as of the date hereof and continuing until such time as the Obligations Debt shall be paid and performed in fullfull or its property is no longer subject to the Lien securing the Debt:
(a) None of Borrowers owns or It has not owned and will not own any asset property or property any other assets other than (iA) its respective the Property currently owned by it, and (iiB) incidental personal and intangible property necessary for relating to the ownership or operation of such the Property.;
(b) None It was formed solely for the purpose of Borrowers engaging in, and has not engaged or and will not engage in in, any business other than the ownership, management management, financing and operation of its respective Property and each of Borrowers will conduct and operate its business as presently conducted and operated.the Property;
(c) Borrower It has not entered and will not enter into any contract or agreement with any Affiliate of any Borrowerits Affiliates, any of its constituent party of any 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 armsarm’s-length basis with third parties other than any such party.parties;
(d) Such Borrower It 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 (i) the Debt, Permitted Indebtedness. No indebtedness other than the Debt and (ii) unsecured trade payables and short term operational debt not evidenced by a note and in an aggregate amount, including such trade payables and debt of any other Borrower, not exceeding $5,000,000.00 in the aggregate at any one time; provided that any Indebtedness incurred pursuant to subclause (ii) shall be (A) outstanding not more than sixty (60) days, and (B) incurred in the ordinary course of business (the Indebtedness indebtedness described in the foregoing clauses (iclauses(v) and (iivi) is referred to herein, collectively, as "of the definition of Permitted Indebtedness"). No Indebtedness may be secured (subordinate or pari passu) by the Property and no indebtedness other than the Debt may be secured (subordinate or pari passu) by any of the 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.personal property;
(e) Such Borrower Other than as provided in the Loan Documents, it has not made and will not make any loans or advances to to, and it has not pledged its assets and 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 has not and shall not acquire obligations or securities of its Affiliates.any Affiliate or constituent party or any Affiliate of any constituent party;
(f) Such Borrower It is and will remain solvent and, except as contemplated by this Agreement wherein Borrowers are jointly and severally liable, such 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.;
(g) Such Borrower It has done or caused to be done, done and will do, do all things necessary to observe organizational formalities limited liability company laws, as the case may be, and preserve its existence, and such Borrower it will not (i) terminate not, nor will it permit or fail suffer any constituent party to comply with the provisions of its organizational documents, 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 its partnership certificate, partnership agreement, certificate of formation, operating agreement agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in any material respect, provided that any amendment or modification to provisions required to be included in Borrowers' organizational documents pursuant to this Agreement shall be deemed material.a manner which would adversely affect its existence as a Single Purpose Entity;
(h) Such Borrower It has and will continue to maintain separate books, books and records, financial statements and bank accounts separate and apart from those of its Affiliates and any other Person. Such Borrower's assets Person and it has and will not be listed as assets on the financial statement of any other Person, provided, however, that such Borrower's assets may be included in a consolidated financial statement of its Affiliates provided that appropriate notation shall be made on such consolidated financial statements continue to indicate the separateness of such Borrower. Such Borrower will file its own tax returns (except to the extent such Borrower consolidation is required to file under GAAP, permitted for tax purposes or as a matter of law, provided that any tax returns) consolidated financial statements contain a note indicating that it and will not file a consolidated federal income tax return with its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person unless permitted or required by applicable law or requirement. Such Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.Person);
(i) Such Borrower It has been and will becontinue to, and at all times has and will continue to hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any of its Affiliates, any of its constituent parties or any Affiliate of such Borrower or any constituent party of such Borrowerparty), has and shall correct any known misunderstanding regarding its status as a separate entity, shall continue to conduct business in its own name., has and shall continue to exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and shall maintain and utilize separate stationery, invoices and checks and it has and will continue to reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(j) Such Borrower It has maintained and intends will continue 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 it nor any constituent party has or will seek Borrower’s dissolution or effect the liquidation, dissolution, winding up, 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 It has not and will not commingle the its funds and other assets of such Borrower with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person, and has held and will hold all of its assets in its own name.;
(m) Such 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.;
(n) Except It has not held and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(o) If it is a limited liability company, (a) at least one of its members shall be a Single Purpose Entity (the “SPE Member”) that is a corporation (or other entity that is an Single Purpose Entity that complies with the Rating Agency requirements) whose sole asset is its interest in the Borrower and that has no less than a one percent (1%) membership interest in the Borrower, and Borrower shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1.28 with respect to the SPE Member, and the SPE Member shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors) as contemplated a duly appointed member of its board of directors or managers, as applicable (or, if such SPE Member is not a corporation, otherwise comply with the Independent Director requirements of the Rating Agencies) or (b) it shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors) as a non economic member in such limited liability company or if such limited liability company is managed by a board of managers or a board of directors, as a duly appointed member of its board of managers or board of directors, as applicable;
(p) It has and shall, at all times, have an operating agreement which provides that, for so long as the Loan is outstanding, its board of directors (or (a) if Borrower is a limited liability company with an SPE Member, the board of directors of the SPE Member or (b) if Borrower is a limited liability company with one (1) (or if required in connection with a Securitization, two (2)) non-economic member as Independent Director, each of its members (including the non-economic member)) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least one member (or if required in connection with a Securitization, two members) (including, if applicable, the non-economic members) who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if Borrower is a limited liability company with an SPE Member, 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 Agreementsentence other than the following actions: (A) 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; (C) engage in any business other than the ownership, maintenance and operation of the Property or, with respect to the SPE Member, acting as a member of the Borrower; (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 the Borrower or of any substantial part of its 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) amend its SPE Member’s certificate of incorporation or the operating agreement of the Borrower; (F) enter into any transaction with an Affiliate not in the ordinary course of the Borrower’s business; or (G) withdraw the SPE Member or the non-economic members who are Independent Directors of the Borrower. With respect to a limited liability company with one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors) as a non-economic member, the affirmative consent of each Independent Director shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable). With respect to a limited liability company with an SPE Member, the affirmative consent of all of the members of such limited liability company, including the SPE Member shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable);
(q) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Property;
(r) Borrower has and shall conduct its business so that the assumptions made with respect to Borrower in that certain opinion letter dated the date hereof addressing substantive non-consolidation and other matters in connection with the Loan have been and shall at all times be true and correct in all respects;
(s) Borrower has not and will not assume permit any Affiliate or guarantee or become obligated constituent party independent access to its bank accounts;
(t) Borrower has and shall pay the salaries of its own employees, if any, and has and shall maintain a sufficient number of employees in light of its contemplated business operations;
(u) Borrower has and shall compensate each of its consultants and agents from its funds for the debts of any other Person services provided to it and does not has paid and will not hold itself out shall continue to be responsible for or have pay from its credit available to satisfy the debts or own assets all obligations of any other Person.kind incurred. Upon the withdrawal or the disassociation of any Independent Director from any constituent entity of Borrower (or from Borrower directly), Borrower 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;
(ov) The organizational documents of such Borrower shall provide that the business is subject to and affairs of such Borrower shall be managed by or under the direction of a board of one or more directors or managers designated by Sole Member, and at complies with all times there shall be at least two (2) duly appointed individuals on the board of directors or managers against Borrower (each, an "Independent Director") of such Borrower who shall not have been at the time of such individual'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 an 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 Borrower, any Affiliate of such Borrower or any direct or indirect parent of such Borrower, except to the extent such Independent Director serves in such capacity in respect of any other Borrower, (ii) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with such Borrower or any Affiliate of 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 limitations on powers and separateness requirements set forth in its organizational documentation as of any such stockholder, director, officer, employee, partner, customer, supplier or other Personthe Closing Date; and
(w) Borrower has and will continue to observe all applicable limited liability company formalities in all material respects.
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Sources: Loan Agreement (Colony Resorts LVH Acquisitions LLC)