Special Purpose Entity. The Borrower has not and shall not: (i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto; (ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation; (iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities; (v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent; (vi) commingle its assets with the assets of any of its Affiliates, or of any other Person; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments; (viii) fail to pay its debts and liabilities from its assets as the same shall become due; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person; (xi) seek its dissolution or winding up in whole or in part; (xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person; (xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates); (xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (xvi) 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, or make an assignment for the benefit of creditors; (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person; (xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet; (xix) fail to pay its own liabilities and expenses only out of its own funds; (xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any; (xxi) acquire the obligations or securities of its Affiliates or members; (xxii) guarantee any obligation of any person, including an Affiliate; (xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate; (xxiv) fail to use separate invoices and checks bearing its own name; (xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder; (xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year; (xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or (xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 5 contracts
Sources: Loan, Security and Collateral Management Agreement (Investcorp Credit Management BDC, Inc.), Loan, Security and Collateral Management Agreement (Investcorp Credit Management BDC, Inc.), Loan, Security and Investment Management Agreement (Investcorp US Institutional Private Credit Fund)
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower and Borrower, the Related Fund Seller or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or members;
(xxii) guarantee any obligation of any personPerson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Global Securitization Services or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower Borrower, the Seller or the Collateral Manager and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviiixxix) fail to file its own tax Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax Tax purposes and is not required to file tax Tax returns under applicable lawApplicable Law, and pay any taxes Taxes required to be paid under applicable lawApplicable Law.
Appears in 5 contracts
Sources: Loan and Security Agreement (Oaktree Specialty Lending Corp), Loan and Security Agreement (Oaktree Specialty Lending Corp), Loan and Security Agreement (Oaktree Specialty Lending Corp)
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the Originator under the Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents ownership of Capital Stock of any REO Asset Owner and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement, (b) the Capital Stock of any REO Asset Owner and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date), terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiaryexcept for a Subsidiary REO Asset Owner, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) except for the Capital Contribution Agreement, enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of Seller, CS Funding VII, the Borrower Originator and the Related Fund CapitalSource Finance LLC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own fundsfunds or out of funds received by it in connection with its ownership of Capital Stock in any REO Asset Owner;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders (other than any REO Asset Owner);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person director who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of any principal of the Servicer (van “Independent Director”), (x) ; provided that such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; its Affiliates or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all members directors (including the consent of the Borrower’s Special Member) is required for the Borrower to Independent Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for tax purposes Third Amendment and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawRestatement Effective Date.
Appears in 4 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. The Borrower Seller has not and shall not:not (other than in connection with the transactions contemplated by the CSIII Sale Agreement and the QRS Sale Agreement, as applicable):
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the applicable Originator under the applicable Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and execution of the performance under the Transaction Documents Sellers Guaranty and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the applicable Originator under the applicable Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any Subsidiary (other entity, than a Subsidiary that solely owns and operates REO Assets) or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligationobligation (other than with respect to the Sellers Guaranty)), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances the Advance owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided, that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any PersonPerson (other than with respect to the Sellers Guaranty), except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Seller and the Related Fund applicable Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (other than with respect to the Sellers Guaranty);
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates (other than an Affiliate that solely owns and operates REO Assets) or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own namebank accounts;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one independent director (1) independent member (the an “Special MemberIndependent Director”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of (v)any principal of the Servicer; provided, (x) however, such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide ensure that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Director) is required received for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralthe 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) Reserved;
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 3 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer transfer, divide or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)) or change its jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative AgentAgent and each Lender, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its operating agreement, agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (c) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund BDC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the BDC so long as the separateness of the Borrower from such Affiliate the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the BDC are disclosed by the BDC within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the BDC or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Loan and Security Agreement (New Mountain Finance Corp), Loan and Security Agreement (New Mountain Finance Corp), Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Restatement Date, upon which the conclusions expressed therein are based.
Appears in 3 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.), Credit Agreement
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 3 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. The Borrower shall not (nor has not and shall not:the Borrower taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets from the Seller under the Purchase Agreement, the transfer and pledge of Receivables and other Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets from the Seller under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreementFormation Documents or other governing documents, as applicable, or fail to observe limited liability company corporate formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viii) fail to pay its debts and liabilities from its assets as the same shall become duenot Solvent;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(x) enter into any contract or agreement with any of its Principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personparties, not including its Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or UACC, as applicable, or any Principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person, except as expressly provided in the Basic Documents;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party Person is transacting business, or (bB) to suggest that it is responsible for the debts Indebtedness of any third party other Person (including any of its principals Principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals Principals or Affiliates, (bB) any Affiliate of a principal Principal or (cC) any other Person;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that a direct or indirect ownership interest in the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of , unless the Borrower from such Affiliate and delivers to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetSecured Parties an acceptable non-consolidation opinion;
(xixxx) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Obligations hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (Bxxv) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute include provisions in the aggregate less than five percent (5%) of such individual’s annual income for Trust Agreement that year;
(xxvii) fail to provide that the unanimous consent of all members (including require the consent of the Borrower’s Special Member) Owner Trustee is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state State law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxvi) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents;
(xxvii) not take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of [***], dated the Closing Date;
(xxviii) elect or otherwise permit the Borrower to be treated as an entity taxable as a corporation for U.S. federal income Tax purposes; and
(xxix) fail to file maintain separate financial statements, showing its own tax returns assets and liabilities separate and apart from those of any other Person, except to or have its assets listed on the extent financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliates in accordance with GAAP, if (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower is treated as a “disregarded entity” for tax purposes from such Affiliates and is to indicate that the Borrower’s assets and credit are not required available to file tax returns under applicable law, satisfy the Indebtedness and pay obligations of such Affiliates or any taxes required to other Person and (b) such assets shall also be paid under applicable lawlisted on the Borrower’s own separate balance sheet.
Appears in 3 contracts
Sources: Warehouse Agreement (Vroom, Inc.), Warehouse Agreement (Vroom, Inc.), Warehouse Agreement (Vroom, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (d) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the Equityholder so long as the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in or the ordinary course of its businessEquityholder or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the Equityholder or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralthe 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 3 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. The At all times on and after the Closing Date through (but not including) Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, limited liability company agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller or its Affiliates, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m) and Section 6.2(n)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower Borrower, on the one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except as provided in pursuant to this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent to the filing of any petitionpetition as to the Borrower, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statementsbooks and records, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) Affiliates so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxv) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Company or Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the LendersCorporation, in each case that is not an Affiliate of the Borrower Borrower, the Seller or the Collateral Manager and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvi) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are complied with;
(xxvii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian Collateral Agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is or to the extent that such failure does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconstitute a breach of Section 5.1(k).
Appears in 3 contracts
Sources: Loan and Security Agreement (Kayne Anderson BDC, Inc.), Loan and Security Agreement (Kayne Anderson BDC, Inc.), Loan and Security Agreement (Kayne Anderson BDC, Inc.)
Special Purpose Entity. The Borrower has not Each of the Issuer and shall notthe Transferor, at all times:
(i) shall do all things necessary to observe corporate formalities, and preserve its existence as a single-purpose, bankruptcy-remote entity;
(ii) shall allocate fairly and reasonably and pay from its own funds the cost of (i) any overhead expenses (including paying for any office space) shared with any of its Affiliates and (ii) any services (such as asset management, legal and accounting) that are provided jointly to it and one or more of its Affiliates;
(iii) shall maintain and utilize separate invoices and checks bearing its own name;
(iv) shall be, and at all times hold itself out to the public as, a legal entity separate and distinct (other than for tax purposes) from any other Person;
(v) shall comply with any other customary rating agency requirements for a single purpose entity as the Agent may require from time to time by notice to the Issuer and the Transferor;
(vi) shall conduct its business and activities in all respects in compliance with the assumptions contained in the legal opinion delivered pursuant to Section 3.1(a)(viii)(I) of this Agreement;
(vii) shall not engage in any business or activity other than the purchaseownership, receipt operation and management maintenance of Collateralthe Receivables, the transfer and pledge of Collateral pursuant to the terms issuance of the Transaction Documents, the entry into Notes and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iiviii) shall not acquire or own any material assets other than (a) the Collateral or (b) Receivables, and such incidental personal property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsReceivables;
(iiiix) shall not merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(ivx) shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, and qualifications to do business, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its partnership agreement, certificate of limited partnership, bylaws, articles of incorporation, operating agreement, articles of organization, certificate of trust, trust agreement or fail to observe limited liability company formalitiesother similar organizational documents, as the case may be;
(vxi) form, acquire or shall not own any Subsidiary, own any equity interest in any other entity, Subsidiary (except for the Issuer) or make any Investment equity investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vixii) except in connection with the servicing of the Receivables, shall not commingle its assets with the assets of any of its members, general partners, shareholders, Affiliates, principals or of any other Person;
(viixiii) shall not incur any IndebtednessIndebtedness for borrowed money, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsObligations;
(viiixiv) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) not fail to maintain its records, books of account accounts and bank accounts separate and apart from those of its members, partners, shareholders, principals and Affiliates or any other Person;
(xxv) shall not, other than its formation documents or any Transaction Documents or as otherwise provided in the Transaction Documents, enter into any contract or agreement with any Personof its members, general partners, shareholders, principals or Affiliates, or any member, general partner, shareholder, principal or Affiliate of any of the foregoing, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany of its members, general partners, shareholders, principals or Affiliates, or any member, general partner, shareholder or Affiliate of any of the foregoing;
(xixvi) shall not seek its dissolution or winding up in whole whole, or in part;
(xiixvii) shall not fail to correct any known misunderstandings regarding the its separate identity of the Borrower and the Related Fund or any other Personidentity;
(xiiixviii) except other than as provided in this Agreementthe Transaction Documents, guarantee, become obligated for, or shall not hold itself out to be responsible for the debt Indebtedness or liabilities of another Person;
(xivxix) fail either to hold itself out shall not, other than owning the Receivables purchased from the Seller pursuant to the public as a legal entity separate and distinct from any other Person or to conduct its business Receivables Purchase Agreement, solely in its own name in order not (a) to mislead others as the case of the Transferor, and owning the Receivables purchased from the Transferor pursuant to the identity Transfer and Servicing Agreement, solely in the case of the Person with which such other party is transacting businessIssuer, make any loans or (b) advances to suggest that it is responsible for any third party, including any member, general partner, shareholder, principal or Affiliate of the debts Issuer, the Seller, the Servicer, the Transferor or any member, general partner, shareholder, principal or Affiliate of any third party (including any of its principals or Affiliates)the foregoing;
(xvxx) shall not fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;operations (provided that this clause shall not require any owner of the Transferor or the Issuer to make any contribution of capital to the Transferor or the Issuer); and
(xvixxi) file or consent to the filing shall not, except for invoicing for collections and servicing of Receivables, share any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
common logo with (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals general partners, shareholders, principals, members or Affiliates, (bii) any Affiliate of a principal any of its general partners, shareholders, principals or members, or (ciii) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: Purchase Agreement (Atlanticus Holdings Corp), Purchase Agreement (Atlanticus Holdings Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationeach Lender;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer's normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or an Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) which shall on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be a natural Person approved by an independent director or manager of another special purpose entity affiliated with the Administrative Agent in its sole discretionServicer, which member mustand (B) has, in each such instance, be a Person who has (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as a Special Member and is notadvisory, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate placement services to the Borrower borrowers or any issuers of its equityholders securitization or Affiliates in the ordinary course of business); (y) a family member of any such memberstructured finance instruments, partner, equityholder, manager, director, officer, employee, creditor, supplier agreements or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearsecurities;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s 's creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (Credit Acceptance Corp), Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower such Loan Party and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, limited liability company agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller or its Affiliates, and sales of Collateral to the Seller and its Affiliates, in accordance with other provisions of this Agreement and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partpart or divide or permit any division of such Loan Party;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of such Loan Party, on the Borrower one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent to the filing of any petitionpetition as to such Loan Party, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrowersuch Loan Party’s assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower such Loan Party from such Affiliate Person and to indicate that the Borrowersuch Loan Party’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrowersuch Loan Party’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate, if applicable;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxv) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization ▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ & Associates, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Citadel SPV or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of such Loan Party, the Borrower Seller or the Servicer and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower such Loan Party, or any of its respective equityholders equityholders, the Servicer or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower such Loan Party, that is not in the direct chain of ownership of the Borrower such Loan Party and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional independent managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to such Loan Party, the Borrower Servicer or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members independent managers and other corporate services to such Loan Party, the Borrower Servicer or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower such Loan Party shall be qualified to serve as a Special Member an Independent Manager of such Loan Party;
(xxvi) fail to ensure that all limited liability company actions relating to the appointment, maintenance or replacement of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Manager are complied with;
(xxvii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrowersuch Loan Party’s Special MemberIndependent Manager) is required for the Borrower such Loan Party to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrowersuch Loan Party, (e) make any assignment for the benefit of the Borrowersuch Loan Party’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower such Loan Party is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is or to the extent that such failure does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconstitute a breach of Section 5.1(k).
Appears in 2 contracts
Sources: Loan and Security Agreement (Blue Owl Credit Income Corp.), Loan and Security Agreement (Owl Rock Core Income Corp.)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents, (ii) with respect to any Revolving Loan or Delayed Draw Loan owned by the Secured Parties hereunder or Borrower, obligations to fund under the terms of the Underlying Instruments and (iii) Indebtedness in conjunction with a repayment of all Advances owed to the Lenders Obligations and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements on customary terms relating to the acquisition, origination and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent directora Special Member, independent manager or independent member with at least three years of employment experience and who is provided by Citadel SPV, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its their respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (vw) above by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, Borrower provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year; provided, further, that Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its reasonable discretion upon the death, resignation or incapacitation of the current Special Member;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid by it under applicable law.
Appears in 2 contracts
Sources: Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp), Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the Originator under the Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Seller and the Related Fund Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person director who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of any principal of the Servicer (van “Independent Director”), (x) ; provided that such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; its Affiliates or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all members directors (including the consent of the Borrower’s Special Member) is required for the Borrower to Independent Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawdate hereof.
Appears in 2 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. The Borrower has not Unless otherwise consented to by Buyer in writing, and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreementthe Facility Documents, change its legal structurePMC shall cause the REO Subsidiary to be a Special Purpose Entity that shall (i) own no assets other than the assets specifically contemplated by the Facility Documents, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest will not engage in any other entitybusiness, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
and transactions specifically contemplated by the Facility Documents; (viiii) not incur any IndebtednessIndebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than Indebtedness pursuant to the Secured Parties hereunder Facility Documents; (iii) not make any loans or in conjunction with a repayment advances to any Affiliate or third party, and shall not acquire obligations or securities of all Advances owed to any Seller’s Affiliates other than PMC’s ownership of the Lenders and a termination of all the Commitments;
REO Subsidiary Interests; (viiiiv) fail to pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its assets as own assets; (v) comply with the provisions of its organizational documents; (vi) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents, or suffer same shall become due;
to be amended, modified or otherwise changed, without the Buyer’s prior written consent; (ixvii) fail to maintain all of its recordsbooks, books of account records and bank accounts financial statements separate and apart from those of any other Person;
its Affiliates; (xviii) enter into any contract or agreement with any Personbe, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to at all times will hold itself out to the public as as, a legal entity separate and distinct from any other Person or to entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct its business solely in its own name in order name, shall not (a) to mislead others as to the identity of the Person with which such other party is transacting business, identify itself or (b) to suggest that it is responsible for the debts of any third party (including any of its principals Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number; (ix) not enter into any transactions other than transactions specifically contemplated by the Facility Documents with any Affiliates);
; (xvx) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
purpose, transactions and liabilities; (xvixi) file not engage in or consent suffer any change in ownership, dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its properties and assets to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
Person (xvii) except as may be required or permitted by the Code and regulations contemplated herein); (xii) not commingle its funds or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from with those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and shall maintain its properties and assets in such manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others; (bxiii) such assets shall also not institute against, or join any other Person in instituting against the REO Subsidiary any proceedings of the type referred to in the definition of “Insolvency Event” hereunder or seek to substantively consolidate the REO Subsidiary in connection with any Insolvency Event with respect to any Seller; (xiv) not hold itself out to be listed on responsible for the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations debts or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any personother Person; (xv) not form, including an Affiliate;
acquire or hold any Subsidiary or own any equity interest in any other entity other than PMC forming the REO Subsidiary and owning the REO Subsidiary Interests; (xxiiixvi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate stationery, invoices and checks bearing its own name;
; (xxvxvii) allocate fairly and reasonably any overhead for shared office space and services performed by an employee of an Affiliate; and (xviii) not pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: Master Repurchase Agreement (PennyMac Mortgage Investment Trust), Master Repurchase Agreement (PennyMac Mortgage Investment Trust)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (d) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the Equityholder so long as the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in or the ordinary course of its businessEquityholder or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the Equityholder or an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (NMF SLF I, Inc.), Loan and Security Agreement (NMF SLF I, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementagreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities, or divide or permit any division of the Borrower;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements relating to the acquisition and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and Borrower, the Related Fund Transferor or any other Person;
(xiii) except as provided for in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equityholder of the Borrower to make any additional capital contributions;
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate Affiliate; provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetsheet (if any);
(xix) fail to pay its own liabilities and expenses only out of its own funds[reserved];
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor or as otherwise permitted hereunder;
(xxii) guarantee any obligation of any person, including an Affiliate[reserved];
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lendersthat routinely provides professional Special Members, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate any of the Borrower that is not in the direct chain of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; provided that the Special Member may serve in similar capacities for other special purpose entities established from time to time by Affiliates of the Borrower; provided, further, that the Borrower shall have (10) Business Days to replace any Special Member with a person approved by the Administrative Agent in its reasonable discretion upon death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance selection or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (vw) above by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: Loan and Security Agreement (Cim Real Estate Finance Trust, Inc.), Loan and Security Agreement (Cim Real Estate Finance Trust, Inc.)
Special Purpose Entity. The Borrower has shall: (a) not and shall not:
(i) own any assets nor engage in any business or activity other than owning the purchase, receipt assets and management of Collateral, engaging in the transfer transactions specifically contemplated hereunder and pledge of Collateral under every other document to be executed pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or this Loan Agreement; (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) not incur any Indebtednessindebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligationguarantee thereof), other than Indebtedness pursuant hereto; (c) not make any loans or advances to the Secured Parties hereunder any third party, and shall not acquire obligations or in conjunction with a repayment securities of all Advances owed to the Lenders and a termination any of all the Commitments;
its Affiliates; (viiid) fail to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its assets as own assets; (e) comply with the provisions of its organizational documents; (f) do all things necessary to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its organizational documents, or suffer same to be amended, modified or otherwise changed without the prior written consent of Lender which shall become due;
not be unreasonably withheld; (ixg) fail to maintain all of its books, records, books of account financial statements and bank accounts separate and apart from those of any other Person;
its Affiliates; (xh) enter into any contract or agreement with any Personbe, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to at all times will hold itself out to the public as as, a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party entity (including any of its principals or Affiliates);
, 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 stationary, invoices and checks; (xvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xvij) not engage in or suffer any change of ownership, dissolution, winding up, liquidation, consolidation or merger in whole or in part; (k) not commingle its funds or other assets with those of any of its Affiliates or any other Person; (l) 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 of its Affiliates or any other Person; and (n) cause each of its direct and indirect owners to agree not to (i) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation insolvency or reorganization statute, case or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than proceeding with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at Borrower; institute any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager proceedings under any applicable insolvency law or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, otherwise seek any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or relief under any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action laws relating to the selection, maintenance relief from debts or replacement the protection of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph debtors generally with respect to Borrower; (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestratorsequester, custodian or any similar official for the Borrower, Borrower or a substantial portion of its properties; or (eiii) make any assignment for the benefit of the Borrower’s 's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: CMBS Loan Agreement (Capital Trust Inc), Master Loan and Security Agreement (Capital Trust Inc)
Special Purpose Entity. The Borrower acknowledges that the Administrative Agent and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon the Borrower's identity as a legal entity that is separate from the Originator. Therefore, from and after the date of execution and delivery of this Agreement, the Borrower shall take all reasonable steps to maintain the Borrower's separate legal identity and to make it manifest to third parties that the Borrower is an entity with assets and liabilities distinct from those of the Originator and not just a division of the Originator. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, the Borrower will not hold itself out to third parties as liable for the debts of the Originator. In addition, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, ) or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, without in each case first obtaining the consent of the Administrative Agent and each Lender;
(iv) control the decision or actions respecting the daily business or affairs of any other Person except as otherwise permitted under this Agreement;
(v) fail to preserve its existence as an entity duly organizedformed, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent and each Lender, amend, modify, terminate or fail to comply with the provisions of its operating agreementorganizational documents, or fail to observe limited liability company partnership formalities;
(vvi) formoperate, acquire or purport to operate, collectively as a single or consolidated business entity with respect to any other Person (except as may be required for U.S. federal income tax purposes and except for accounting purposes, it may be consolidated with other Persons (including the Originator) as permitted by GAAP);
(vii) own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent and each Lender;
(viviii) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viiix) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsLenders;
(viiix) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixxi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xxii) enter into any contract or agreement with any Person, except (a) the Transaction Documents and the Master Participation Agreement and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xixiii) seek its dissolution or winding up in whole or in part;
(xiixiv) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund any Affiliate or any principal thereof or any other Person;
(xiiixv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name (other than for U.S. income tax purposes) in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, except to the extent that the Borrower’s assets may be included 's financial and operating results are consolidated with those of the Originator in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number pay the salaries of its own employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixxiii) acquire the obligations or securities of its Affiliates or membersstockholders, other than with respect to any Eligible Loan whose Obligor is an Affiliate of the Collateral Manager or the Originator so long as such Eligible Loan shall have been acquired from a Person who is not Affiliated with the Collateral Manager or the Originator;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate invoices and checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;and
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawmaintain at least one Independent Manager.
Appears in 2 contracts
Sources: Loan and Servicing Agreement (Franklin BSP Lending Corp), Loan and Servicing Agreement (Business Development Corp of America)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (d) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the Equityholder so long as the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in or the ordinary course of its businessEquityholder or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the Equityholder or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.)
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt origination, receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents Documents, the entry into any and all documents and agreements in connection therewith, including, without limitation, any documents any agreements pertaining to the supervision and funding of the Borrower to exercise any and all rights with respect thereto and to establish, hold and maintain deposit accounts, and such other activities as are incidental theretoincidental, necessary or appropriate thereto or to accomplish the foregoing;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower Borrower, the ownership of the Collateral and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under this Agreement, fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, limited liability company agreement or fail to observe observe, in all material respects, limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments, (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.) and (3) Indebtedness pursuant to the Transaction Documents or any agreement for the sale or disposition of Loans;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from an Affiliate Transferor, sales of Collateral to an Affiliate Transferor, and distributions (including Permitted RIC Distributions) to its member in accordance with the terms hereof shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partpart or divide or permit any division of the Borrower;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower Borrower, on the one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations (to the extent there exists sufficient cash flow from the Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own fundsfunds (including funds contributed to its capital by the Equityholder) (to the extent there exists sufficient cash flow from the Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyany (for the avoidance of doubt, such number may be zero);
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxv) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization ▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ & Associates, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Citadel SPV or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower Borrower, the Collateral Manager or any Affiliate Transferor and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower Borrower, or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower Borrower, that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional independent managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members independent managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier a person described in (a) or service provider(b) above; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower;
(xxvi) fail to ensure that all limited liability company actions relating to the appointment, provided that the fees that such individual earns from serving as Special Member of affiliates maintenance or replacement of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Manager are complied with;
(xxvii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is or to the extent that such failure does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconstitute a breach of Section 5.1(k).
Appears in 2 contracts
Sources: Loan and Security Agreement (Stepstone Private Credit Fund LLC), Loan and Security Agreement (Stepstone Private Credit Fund LLC)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationeach Lender;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business; provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personany principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or an Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) which shall on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be a natural Person approved by an independent director or manager of another special purpose entity affiliated with the Administrative Agent in its sole discretionServicer, which member mustand (B) has, in each such instance, be a Person who has (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as a Special Member and is notadvisory, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate placement services to the Borrower borrowers or any issuers of its equityholders securitization or Affiliates in the ordinary course of business); (y) a family member of any such memberstructured finance instruments, partner, equityholder, manager, director, officer, employee, creditor, supplier agreements or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearsecurities;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (Credit Acceptance Corp), Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets, the transfer and pledge Grant of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsCollateral;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of Sections 1.05, 1.07, 1.08, 4.02(b) and 10.01 of its operating agreementagreement and any of the defined terms in Section 1.01 of its operating agreement that are contained in any of the above-mentioned sections thereof, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) an REO Affiliate without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Intercreditor Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Lender, except for trade payables in the ordinary course of its business; provided, that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any PersonAffiliate, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with unrelated third parties other than such Personparties;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than the Loans, Cash and Permitted Investments);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations (without limiting the foregoing, it is acknowledged and agreed that a single member limited liability company is a disregarded entity for purposes of the Internal Revenue Code);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct ownership interest in the Borrower to the extent it has the ability to control the same, other than a pledge of the membership interests in the Borrower to secure the Fortress Notes, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided(without limiting the foregoing, howeverit is acknowledged that for accounting purposes, that the Borrower’s assets Company may be consolidated with another Person as required by GAAP and included in a such Person’s consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements);
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number pay the salaries of its own employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxiixxv) guarantee any obligation of any personPerson, including an AffiliateAffiliate (other than any REO Subsidiary);
(xxiiixxvi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvii) fail to use separate invoices and checks bearing its own name;
(xxvxxviii) pledge or permit the pledge of its assets for the benefit of any other Person, other than with respect to the payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxix) fail at any time to have at least one independent manager (1) independent member (the an “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as currently a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, trade creditor, supplier shareholder, manager or service provider; member (or spouse, parent, sibling or child of the foregoing) of (a) the Originator, (b) the Borrower, (c) any principal of the Originator, (d) any Affiliate of the Originator, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement any principal of the Special Member shall require the written consent Originator; provided, however, such Independent Manager may be an independent manager or an independent manager of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;Originator; and
(xxviixxx) fail to provide that the unanimous consent of all members its managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: Secured Loan and Servicing Agreement (NewStar Financial, Inc.), Secured Loan and Servicing Agreement (NewStar Financial, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) i. engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) . acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) . merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) . fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementagreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) v. form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) . commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 2 contracts
Sources: Loan, Security and Collateral Management Agreement (AG Twin Brook Capital Income Fund), Loan, Security and Collateral Management Agreement (AGTB Private BDC)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower Issuer has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt and management of Collateral, Contract Assets from the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents Originator hereunder and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Contract Assets from the Originator hereunder and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsIssuer;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreementCertificates of Formation, or fail to observe limited liability company entity formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentPerson;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson [, other than to the extent described in Section 7.01];
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to indebtedness created hereunder except for trade payables in the Secured Parties hereunder or in conjunction with ordinary course of its business, provided that such debt is not evidenced by a repayment of all Advances owed to the Lenders note and a termination of all the Commitmentspaid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Issuer or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixix) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliatesaffiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any ownership interest in the Issuer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersequity holders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Transfer and Servicing Agreement (Greatamerica Leasing Receivables 2000-1 LLC)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralthe 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of A▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementlimited liability company agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted InvestmentsInvestments or any Investment otherwise permitted hereunder) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to incurred under the Secured Parties hereunder or in conjunction with a repayment terms of all Advances owed to the Lenders and a termination of all the CommitmentsTransaction Documents;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements relating to the acquisition and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and from the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) except as may be required or permitted by the Code and U.S. Treasury regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate Affiliates; provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds[Reserved];
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate[Reserved];
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member manager (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member and must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate any of the Borrower that is not in the direct chain of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to as an Independent Manager of the Borrower or any of its equityholders or Affiliates in the ordinary course of businessthat is required by a creditor to be a single purpose bankruptcy remote entity); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (vw) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, ; provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681 provided that the Borrower shall have ten (10) Business Days to replace any Independent Manager upon the death, resignation or incapacitation of the current Independent Manager;
(xxvii) fail to provide that the unanimous consent of (A) all members and (including B) the consent of the Borrower’s Special Member) Independent Manager is required for the Borrower to (a1) institute proceedings to be adjudicated bankrupt or insolvent, (b2) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c3) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d4) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e5) make any assignment for the benefit of the Borrower’s creditors, (f6) admit in writing its inability to pay its debts generally as they become due, or (g7) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Willow Tree Capital Corp)
Special Purpose Entity. The Borrower has not and shall not:
(ia) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iib) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iiic) merge into or consolidate with any Person or dissolve, divide, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(ivd) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(ve) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Portfolio Investments, Cash and Cash Equivalents) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Loans owed to the Lenders and a termination of all the Commitments;
(viiih) fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents and (bii) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such PersonAffiliate;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to correct any known misunderstandings regarding the separate identity of the Borrower ▇▇▇▇▇▇▇▇ and the Related Fund Parent or any other Person;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvip) 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, or make an assignment for the benefit of creditors;
(xviiq) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiir) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower▇▇▇▇▇▇▇▇’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixs) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxit) acquire the obligations or securities of its Affiliates or members;
(xxiiu) guarantee any obligation of any person, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivw) fail to use separate invoices and checks bearing its own name;
(xxvx) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Ai) fail at any time to have at least one (1) independent member manager (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member Independent Manager must, in each such instance, be a Person natural person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience experience, and who is provided by Cogency Global Inc., CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Membersindependent managers, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members independent managers and other corporate services in the ordinary course Ordinary Course of its businessBusiness, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member an independent manager or special member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than an employee of a nationally recognized company that routinely provides professional Special Members independent managers and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course Ordinary Course of businessBusiness); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (Bii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member Independent Manager shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member independent manager or special member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member independent manager of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiz) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower▇▇▇▇▇▇▇▇’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower▇▇▇▇▇▇▇▇, (e) make any assignment for the benefit of the Borrower▇▇▇▇▇▇▇▇’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxviiiaa) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law; or
(bb) fail to comply with the special purpose entity requirements set forth in this Section 8.1.26 such that ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC or another law firm reasonably acceptable to the Agent could no longer render a substantive nonconsolidation opinion with respect to Borrower.
Appears in 1 contract
Sources: Loan and Security Agreement (Flat Rock Core Income Fund)
Special Purpose Entity. The Borrower has not not, and shall not:
(ia) engage in any business or activity other than the purchaseacquisition, receipt ownership, operation and management maintenance of the Receivables, the Participation Interests and the other Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto, provided, that for the avoidance of doubt, Borrower hereby agrees that it shall not originate Receivables or Participation Interests;
(iib) acquire or own any material assets other than (a) the Collateral or (b) Receivables, the Participation Interests and the other Collateral, and such incidental personal property as may be necessary for the operation of the Borrower Receivables, the Participation Interests and the performance of its obligations under the Transaction Documentsother Collateral;
(iiic) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(ivd) fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, and qualifications to do business, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its partnership agreement, certificate of limited partnership, bylaws, articles of incorporation, operating agreement, articles of organization, or fail to observe limited liability company formalitiesother similar organizational documents, as the case may be;
(ve) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in investment in, any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its members, general or limited partners, shareholders, Affiliates, principals or of any other Person;
(viig) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsObligations;
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account accounts and bank accounts separate and apart from those of the members, partners, shareholders, principals and Affiliates of each Seller and Servicer or any other Person;
(xj) other than any Loan Documents or the Tier II Purchase and Sale Agreement or as otherwise required by the Loan Documents, without the consent of the Agent, enter into any contract or agreement with any Personmember, general or limited partner, shareholder, principal or Affiliate of Borrower, or any Seller, or any member, general or limited partner, shareholder, principal or Affiliate of any of the foregoing, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than parties; provided that, for purposes of such Personfairness determination, “third parties” shall not include any member, general or limited partner, shareholder, principal or Affiliate of Borrower or any Seller, or any member, general or limited partner, shareholder or Affiliate of any of the foregoing;
(xik) seek its the dissolution or winding up in whole whole, or in part, of Borrower;
(xiil) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other PersonBorrower, as applicable;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt debts of another Person;
(xivn) other than owning the Receivables, the Participation Interests and other Collateral purchased from Seller pursuant to the Tier II Purchase and Sale Agreement, respectively, make or extend any financial accommodations or leases to any third party, including any member, general or limited partner, shareholder, principal or Affiliate of Borrower, Servicer, Seller or Indemnity Guarantor, or any member, general or limited partner, shareholder, principal or Affiliate of any of the foregoing;
(o) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it Borrower is responsible for the debts of any third party (including any member, general or limited partner, shareholder, principal or Affiliate of its principals Borrower, Servicer or Affiliatesany Seller, or any member, general or limited partner, shareholder, principal or Affiliate of any of the foregoing);
(xvp) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xviq) except for invoicing for collections and servicing of the Receivables and the Participation Interests, share any common logo with or hold itself out as or be considered as a department or division of (i) any general or limited partner, shareholder, principal, member or Affiliate of Borrower, (ii) any Affiliate of a general or limited partner, shareholder, principal or member of Borrower, or (iii) any other Person;
(r) without the unanimous written consent of its directors, managers or managing members, or general or limited partners, as the case may be, and the consent of any independent directors or independent managers required herein, 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, or make an assignment for the benefit of creditors;; or
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (As) fail at any time to have at least one (1) of its directors or managers being independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager directors or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case managers that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: been for at least five (v5) years a member, partner, equityholderdirector, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, trade creditor, supplier or service provider; shareholder (or spouse, parent, sibling or child of the foregoing) of (z) or a Person that controls who directly or indirectly controls) (whether directly, indirectly or otherwisei) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eii) make any assignment for the benefit general or limited partner, shareholder, principal, member or Affiliate of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (giii) take any action in furtherance Affiliate of any general or limited partner, shareholder, principal or member of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawBorrower.
Appears in 1 contract
Sources: Loan and Security Agreement (CURO Group Holdings Corp.)
Special Purpose Entity. The Borrower has Other than as required or permitted by the Transaction Documents or the SkyMiles Agreements, the SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt receipt, management and management sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and SkyMiles Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents and SkyMiles Agreements to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Discharge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under Section 5.07(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any equity interest Equity Interests in any other entity, or make any Investment in any Person (other than Permitted Investments) without to the prior written consent of the Administrative Agentextent permitted in its memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and (iv) ordinary course contingent obligations under or any terms thereof related to the SkyMiles Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) SkyMiles Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and Delta and/or its Subsidiaries substantially consistent with Delta’s arrangements with its other Subsidiaries that (I) terminate upon such SPV Party ceasing to be a Subsidiary of Delta, (II) do not involve the payment of cash to or from such SPV Party, (III) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bIV) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Agreement, (v) intercompany agreements for loans from Loyalty Co to Delta permitted under Section 6.01, (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such Person, (y) contain non-petition covenants with respect to such SPV Party consistent with the provisions set forth in this Agreement and (z) contain nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Agreement;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identity identities of any SPV Party, on the Borrower one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except as provided in this Agreementpursuant to the Transaction Documents and SkyMiles Agreements, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents or SkyMiles Agreements));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents and SkyMiles Agreements), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Affiliate Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Affiliate Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to maintain a sufficient number of maintain, hire or employ any individuals as employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxit) acquire the obligations or securities of issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party or (ii) intercompany loans permitted under Section 6.01);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxvv) pledge its assets for to secure the benefit obligations of any other Person, Person other than with respect to payment of the indebtedness pursuant to the Secured Parties hereunderLoan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxvi) (Aw) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience Independent Directors as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is are required by a creditor to be a single purpose bankruptcy remote entity); pursuant Section 5.08;
(x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxviiiy) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for U.S. federal and applicable state and local income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawpurposes.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (Delta Air Lines, Inc.)
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the OFS Parent;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than equity interests in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or equity interests in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) to the extent the OFS Parent acquires any Collateral from the Borrower, the amount of any cash or other assets paid or transferred to the Borrower in connection therewith in excess of the fair market value thereof shall be deemed a capital contribution by the OFS Parent to the Borrower, and (ii) the member of the Borrower may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower and the Related Fund any Seller or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote of the applicable managers (including the Independent Manager); provided that, unless prior written notice is provided to the Administrative Agent, neither the Borrower nor the OFS Parent shall cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian Trustee or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviiixxix) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Investment Management Agreement (Investcorp Credit Management BDC, Inc.)
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the Originator under the Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or Swingline Advances owed to the Lenders Purchasers or the Swingline Purchaser, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Seller and the Related Fund Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person director who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of any principal of the Servicer (van “Independent Director”), (x) ; provided that such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Director) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
: (i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
; (iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer transfer, divide or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)) or change its jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative AgentAgent and each Lender, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
; (iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its operating agreement, agreement or otherwise fail to observe limited liability company formalities;
; (v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
; (vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
; USActive 37382726.2937382726.32 79 (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Transaction Documents; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
Person and (c) as otherwise permitted under the Transaction Documents; (xi) seek its dissolution or winding up in whole or in part;
; (xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund BDC or any principal or Affiliate thereof or any other Person;
; (xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
; (xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xvi) 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, or make an assignment for the benefit of creditors;
; (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
; (xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the BDC so long as the separateness of the Borrower from such Affiliate the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of USActive 37382726.2937382726.32 80 the BDC are disclosed by the BDC within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
consolidated financial statements; (xix) fail to pay its own liabilities and expenses only out of its own funds;
; (xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
; (xxi) acquire the obligations or securities of its Affiliates or members;
stockholders; (xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
; (xxivxxiii) fail to use separate invoices and checks bearing its own name;
; (xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;; (xxv)
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the BDC or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent LLC Agreement; (5%) of such individual’s annual income for that year;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and (axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person;, except to the extent contemplated by this Agreement; 111
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;; 112
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with 113 respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the Originator under the Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent except with respect to the “Issuer” (as defined in the Indenture);
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Seller and the Related Fund Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person director who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of any principal of the Servicer (van “Independent Director”), (x) ; provided that such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; its Affiliates or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all members directors (including the consent of the Borrower’s Special Member) is required for the Borrower to Independent Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawClosing Date.
Appears in 1 contract
Special Purpose Entity. The Borrower Such Loan Party has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower such Loan Party and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof, including the last paragraph of this Section), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formationformation (other than, in the case of the Guarantor Subsidiaries, as set forth in the last paragraph of this Section), or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any SubsidiarySubsidiary (other than, own any equity interest in any other entitythe case of the Borrower, the Guarantor Subsidiaries) or make any Investment in any Person (other than Permitted Investments, the Closing Date Capital Contributions and Permitted Capital Contributions) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or hereunder, in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and, in the case of the Guarantor Subsidiaries, the Existing Facilities;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other PersonPerson (in the case of the Guarantor Subsidiaries, other than for tax purposes);
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and, in the case of the Guarantor Subsidiaries, the Existing Facilities and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in partpart or divide (other than, in accordance with the last paragraph of this Section);
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower such Loan Party and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson other than pursuant to this Agreement;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person (in the case of the Guarantor Subsidiaries, other than for tax purposes) or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders (other than, in the case of the Borrower, the Guarantor Subsidiaries);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, Person other than with respect pursuant to payment of the indebtedness to the Secured Parties hereunderthis Agreement;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesssuch Loan Party or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates such Affiliate (other than as a Special Member an independent manager or similar position of the Borrower such Loan Party or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of such Loan Party or any voting, investment or other ownership interests of any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier such Loan Party or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies permitted pursuant to the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearapplicable Loan Party LLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for such Loan Party to take any Material Action; and
(xxvii) take or refrain from taking, as applicable, each of the Borrower to activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, dated as of the date hereof upon which the conclusions expressed therein are based. USActive 56057294.10 Notwithstanding the foregoing, after any Guarantor Subsidiary has sold or otherwise disposed of all Loans held by it (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent transferred such Loans to the institution Borrower) and distributed all of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent its cash to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make less any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes amounts required to be paid under applicable lawreserved or applied by such Guarantor Subsidiary for expenses or other liabilities of such Guarantor Subsidiary, such Guarantor Subsidiary shall be permitted to terminate its existence and dissolve; provided that, such Guarantor Subsidiary shall provide notice to the Administrative Agent 30 days (or such lesser period as may be agreed to by the Administrative Agent) in advance of any such dissolution.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer transfer, divide or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)) or change its jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative AgentAgent and each Lender, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its operating agreement, agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;; USActive 37382726.29 73
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (c) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund BDC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the BDC so long as the separateness of the Borrower from such Affiliate the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of USActive 37382726.29 74 the BDC are disclosed by the BDC within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the BDC or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower has not done the following and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Deal Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Deal Agent;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principal or other Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personany of its principal or other Affiliates;
(xi) seek its dissolution or winding winding-up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or an Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included Person (except its parent in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;; 77
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, employees (if any) in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) which shall on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be a natural Person approved by an independent director or manager of another special purpose entity affiliated with the Administrative Agent in its sole discretionServicer, which member mustand (B) has, in each such instance, be a Person who has (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as a Special Member and is notadvisory, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate placement services to the Borrower borrowers or any issuers of its equityholders securitization or Affiliates in the ordinary course of business); (y) a family member of any such memberstructured finance instruments, partner, equityholder, manager, director, officer, employee, creditor, supplier agreements or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearsecurities;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer transfer, divide or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)) or change its jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative AgentAgent and each Lender, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its operating agreement, agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (c) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund BDC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the BDC so long as the separateness of the Borrower from such Affiliate the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the BDC are disclosed by the BDC within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the BDC or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or Receivables and rights in the Related Property and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amendmake any material amendment or modification, modify, or terminate or fail to comply with the material provisions of its operating agreementagreement (which includes the special purpose entity limitations), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets or liabilities with the assets or liabilities of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentshereunder;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue (unless otherwise contested in good faith by appropriate proceedings);
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract Approved Loan or Approved Lease or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personparties;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Originator or any other Person;
(xiii) except as provided in this Agreementmake any loan or advances to any third party, guarantee, become obligated forincluding any principal or Affiliate, or hold itself out to be responsible for evidence of indebtedness issued by any other Person (other than the debt of another PersonReceivables, cash and Permitted Investments);
(xiv) fail either to file its own separate tax return or a consolidated federal income tax return with one or more of its Affiliates, except as may be permitted by the Code and regulations;
(xv) actively hold itself out to the public as such to represent that it is not a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business obligations of its size business and character and in light of its contemplated business operations;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included direct or indirect ownership interest in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from to the extent it has the ability to control the same, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheettransfer;
(xix) fail to pay its own liabilities and expenses only out the salaries of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixx) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxii) fail to use separate invoices and checks bearing its own name;
(xxvxxiii) pledge or permit the pledge of its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxiv) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and director (an “Independent Manager” or “Independent Director”) acceptable to the Administrative Agent who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as currently a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade creditor shareholder, supplier manager or service providermember (or spouse, parent, sibling or child of the foregoing) of (a) the Servicer, (b) the Borrower or (c) any principal or Affiliate of the Servicer or the Borrower; provided that such Independent Manager may be an independent manager or an independent director of another special purpose entity affiliated with the Servicer; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance selection or replacement of the Special Member shall require Independent Manager or Independent Director, as applicable, are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of managers (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve Independent Manager or Independent Director, as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearapplicable);
(xxviixxv) fail to provide in its operating agreement that the unanimous consent of all members managers, as applicable (including the consent of the Borrower’s Special MemberIndependent Manager or Independent Director, as applicable) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, and (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxvi) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Revolving Credit Agreement (Sparta Commercial Services, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
: BUSINESS.33662032.9 109 (i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
, including, without limitation, capital contributions which it may receive from the Equityholder; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
; (iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
; (v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
; (vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Transaction Documents; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such Person;
Person and (d) as otherwise permitted under the Transaction Documents; (xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Guardian IV BDC, L.L.C.)
Special Purpose Entity. The Borrower has not and shall not:
(ia) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iib) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iiic) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(ivd) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(ve) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Portfolio Investments, Cash and Cash Equivalents) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Loans owed to the Lenders and a termination of all the Commitments;
(viiih) fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents and (bii) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such PersonAffiliate;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Parent or any other Person;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvip) 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, or make an assignment for the benefit of creditors;
(xviiq) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiir) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixs) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxit) acquire the obligations or securities of its Affiliates or members;
(xxiiu) guarantee any obligation of any person, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivw) fail to use separate invoices and checks bearing its own name;
(xxvx) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Ai) fail at any time to have at least one (1) independent member manager (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member manager must, in each such instance, be a Person natural person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience experience, and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (Bii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member Independent Manager shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiz) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxviiiaa) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law; or
(bb) fail to comply with the special purpose entity requirements set forth in this Section 8.1.26 such that Eversheds S▇▇▇▇▇▇▇▇▇ (US) LLP or another law firm reasonably acceptable to the Agent could no longer render a substantive nonconsolidation opinion with respect to Borrower.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral Loans and rights in the Related Property, (b) the Equity Interests in any REO Affiliate, (c) Equity Securities acquired (i) if a Loan is no longer an Eligible Loan or (bii) in connection with the exercise of remedies or with respect to any work out or restructuring of a Loan and (d) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amendmake any material amendment or modification, modify, or terminate or fail to comply with the material provisions of its operating agreementagreement (which includes the special purpose entity limitations), or fail to observe limited liability company formalities;
(v) form, acquire other than with respect to the Equity Interests in any REO Affiliate or own any SubsidiaryEquity Securities, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets or liabilities with the assets or liabilities of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentshereunder;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue (unless otherwise contested in good faith by appropriate proceedings); provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson in the reasonable judgment of the Borrower other than the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Originator or any other Person;
(xiii) except as provided in this Agreementmake any loan or advances to any third party, guarantee, become obligated forincluding any principal or Affiliate, or hold itself out to be responsible for evidence of indebtedness issued by any other Person (other than the debt of another PersonLoans, cash and Permitted Investments);
(xiv) fail either to file its own separate tax return or a consolidated federal income tax return with one or more of its Affiliates, except as may be permitted by the Code and regulations;
(xv) actively hold itself out to the public as such to represent that it is not a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business obligations of its size business and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included direct or indirect ownership interest in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from to the extent it has the ability to control the same, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheettransfer;
(xix) fail to pay its own liabilities and expenses only out the salaries of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixx) acquire the obligations or securities of its Affiliates or membersstockholders except for obligations or securities of any REO Affiliate or any other Subsidiary permitted hereunder;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxii) fail to use separate invoices and checks bearing its own name;
(xxvxxiii) pledge or permit the pledge of its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxiv) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by Independent Manager or Independent Director acceptable to the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service providerAgent; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance selection or replacement of the Special Member shall require Independent Manager or Independent Director, as applicable, are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of managers (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve Independent Manager or Independent Director, as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearapplicable);
(xxviixxv) fail to provide in its operating agreement that the unanimous consent of all members managers, as applicable (including the consent of the Borrower’s Special MemberIndependent Manager or Independent Director, as applicable) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, and (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxvi) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of A▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Revolving Credit Agreement (NewStar Financial, Inc.)
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, acquisition and receipt of Assets and management of Collateralrelated assets from the Depositor under the Depositor Sale Agreement, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Depositor under the Depositor Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower Seller and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure or jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organizeda Delaware statutory trust, validly existing and in good standing under the laws of the jurisdiction of its organization or formationDelaware, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, the Trust Agreement or fail to observe limited liability company statutory trust formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Concentration Account Agreement, commingle its assets with the assets of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Purchasers and the Secured Parties in connection with the Transaction Documents, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a termination of all the Commitmentsnote and is paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Seller and the Related Fund Originator or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold any evidence of indebtedness issued by any other Person (other than the Assets, cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) except as set forth in the Transaction Documents, fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number pay the salaries of its own employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersAffiliates;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviii) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of Dechert LLP, except to dated as of the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;; [Investcorp] Loan and Security Agreement
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;; [Investcorp] Loan and Security Agreement
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;; [Investcorp] Loan and Security Agreement
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.. [Investcorp] Loan and Security Agreement
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp Credit Management BDC, Inc.)
Special Purpose Entity. The Borrower has not Unless otherwise consented to by Buyer in writing, and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreementthe Facility Documents, change its legal structureSeller shall, or jurisdiction of formation;
and shall cause the REO Subsidiary to be a special purpose entity that shall (ivi) fail to preserve its existence as an entity duly organized, validly existing own no assets and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest will not engage in any other entitybusiness, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets and transactions specifically contemplated by the Facility Documents and sales, purchases, distribution or contribution of any of its Affiliates, or of any other Person;
assets made in connection with assets that are no longer subject to a Transaction; (viiii) not incur any IndebtednessIndebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than Indebtedness pursuant to the Secured Parties hereunder Facility Documents; (iii) not make any loans or in conjunction with a repayment advances to any Affiliate or third party and shall not acquire obligations or securities of all Advances owed to Seller’s or Guarantor’s Affiliates other than Seller’s ownership of the Lenders REO Subsidiary Interests and a termination of all the Commitments;
Participation Interests; (viiiiv) fail to pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its assets as own assets; (v) comply with the provisions of its organizational documents; (vi) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents, or suffer same shall become due;
to be amended, modified or otherwise changed, without the Buyer’s prior written consent; (ixvii) fail to maintain all of its recordsbooks, books of account records and bank accounts financial statements separate and apart from those of any other Person;
its Affiliates (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would such financial statements may be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out consolidated to the public extent consolidation is required under GAAP or as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity matter of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (aA) appropriate notation shall be made on such consolidated financial statements if prepared to indicate the separateness of the Borrower it from such Affiliate and to indicate that the Borrower’s its assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (bB) such assets shall also be listed on the Borrower’s its own separate balance sheet;
sheet if prepared and (xixC) fail to pay shall file its own liabilities tax returns if filed, except to the extent consolidation is required or permitted under applicable law); (viii) be, and expenses only at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name and shall not identify itself or any of its own funds;
Affiliates as a division or part of the other; (xxix) fail to not enter into any transactions other than transactions specifically contemplated by the Facility Documents with any Affiliates; (x) maintain a sufficient number of employees, if any, adequate capital in light of its contemplated business operations purpose, transactions and liabilities; (xi) not engage in or to pay suffer any change in ownership other than transactions specifically contemplated by the salaries Facility Documents, dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its own employees, if any;
properties and assets to any Person (xxiexcept as contemplated herein); (xii) acquire the obligations not commingle its funds or securities of its Affiliates or members;
(xxii) guarantee any obligation other assets with those of any personAffiliate or any other Person and shall maintain its properties and assets in such manner that it would not be costly or difficult to identify, including an Affiliate;
segregate or ascertain its properties and assets from those of others; (xxiiixiii) fail not institute against, or join any other Person in instituting against Seller or REO Subsidiary any proceedings of the type referred to in the definition of “Insolvency Event” hereunder or seek to substantively consolidate the REO Subsidiary or Seller with each other or the Guarantor in connection with any Insolvency Event; (xiv) not hold itself out to be responsible for the debts or obligations of any other Person; (xv) not form, acquire or hold any Subsidiary or own any equity interest in any other entity other than the REO Subsidiary Interests and the Participation Interests; (xvi) allocate fairly and reasonably any overhead expenses that are for shared with an Affiliate, including paying for office space and services performed by any an employee of an Affiliate;
; and (xxivxvii) fail to use separate invoices and checks bearing its own name;
(xxv) not pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Master Repurchase Agreement (Mr. Cooper Group Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationAgent and each Lender;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent and each Lender, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investmentsin connection with retaining any equity or other securities pursuant to Section 6.5) without the prior written consent of the Administrative AgentAgent and each Lender;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness the Advances and indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Lenders, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Servicer, or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another PersonPerson other than pursuant to the Transaction Documents;
(xiv) except as permitted under the Transaction Documents, make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than the Loans, cash and Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xviixviii) except as may permit any transfer (whether in any one or more transactions) of any direct ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer; provided that no consent shall be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) necessary with respect to any of its principals or Affiliates, (b) any transfer to an Affiliate of a principal or (c) any other PersonG▇▇▇▇ BDC;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any (without limiting the foregoing, it is acknowledged that for accounting purposes such Borrower may be consolidated with another Person as required by GAAP including in such other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements);
(xixxx) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxi) fail to maintain a sufficient number pay the salaries of its own employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixxii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliatestockholders;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge or permit the pledge of its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one independent manager (1) independent member (the an “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as currently a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade creditor shareholder, supplier manager or service provider; member (or spouse, parent, sibling or child of the foregoing) of (a) the Servicer, (b) the Borrower, (c) any Originator, or (z) a Person that controls (whether directly, indirectly or otherwised) any principal or Affiliate of (v)the Servicer, (x) the Borrower, or (y) aboveany Originator; provided, however, such Independent Manager may be an independent manager or (B) an independent director of another special purpose entity affiliated with the Servicer or fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of such Independent Manager are duly authorized by the Special Member shall require the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of managers (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) vote of such individual’s annual income for that year;Independent Manager); and
(xxvii) fail to provide that the unanimous consent of all members or directors, as applicable (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Special Purpose Entity. The (a) Borrower has not and shall will not:
(i) engage in any business or activity other than the purchaseownership, receipt operation and management of Collateral, the transfer and pledge of Collateral pursuant to the terms maintenance of the Transaction DocumentsProperty, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (aA) the Collateral or Property, and (bB) such incidental property Personal Property as may be necessary for the ownership, leasing, maintenance and operation of the Borrower and the performance of its obligations under the Transaction DocumentsProperty;
(iii) merge into or consolidate with any Person Person, or dissolve, terminate or terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws applicable Legal Requirements of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesorganizational documents;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entitysubsidiary, or make any Investment in investment in, any Person (other than Permitted Investments) without the prior written consent of the Administrative Agentthan, with respect to any Principal, in Borrower);
(vi) commingle its funds or assets with the funds or assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) the Debt and, prior to the Secured Parties hereunder date hereof, the Prior Loan, (B) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date, and/or (C) Permitted Equipment Leases; provided however, the aggregate amount of the indebtedness described in conjunction with a repayment (B) and (C) shall not exceed at any time two percent (2%) of all Advances owed to the Lenders and a termination outstanding principal amount of all the CommitmentsDebt. No Indebtedness other than the Debt may be secured (subordinate or pari passu) by the Property;
(viii) fail to pay maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i)appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and liabilities from other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower has maintained and will maintain its assets books, records, resolutions and agreements as the same shall become dueofficial records;
(ix) fail enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate, 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 unaffiliated third parties;
(x) maintain its recordsassets in such a manner that it will be costly or difficult to segregate, books of account and bank accounts separate and apart ascertain or identify its individual assets from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution assume or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding guaranty the separate identity debts of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt debts of another any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns (unless prohibited by applicable Legal Requirements from doing so);
(xiv) fail either to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or to part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (bD) to suggest that it is responsible for the debts of correct any third party (including any of known misunderstanding regarding its principals or Affiliates)separate identity;
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations (to the extent there exists sufficient cash flow from the Property to do so);
(xvi) without the prior unanimous written consent of all of its partners or members, as applicable, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvencyCreditors Rights Laws, bankruptcy(b) seek or consent to the appointment of a receiver, liquidation liquidator or reorganization statuteany similar official, (c) take any action that might cause such entity to become insolvent, or (d) make an assignment for the benefit of creditors;
(xvii) except as may be required fail to allocate shared expenses (including, without limitation, shared office space) or permitted by the Code fail to use separate stationery, invoices and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Personchecks;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out (including, without limitation, salaries of its own funds;
(xxemployees) from its own funds or fail to maintain a sufficient number of employees, if any, employees in light of its contemplated business operations or (in each case to pay the salaries of its own employees, if anyextent there exists sufficient cash flow from the Property to do so);
(xxixix) acquire the obligations or securities of its Affiliates partners, members, shareholders or membersother Affiliates, as applicable;
(xxiixx) guarantee identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it; or
(b) If Borrower is a partnership or limited liability company (other than an Acceptable LLC), each general partner (in the case of a partnership) and at least one member (in the case of a limited liability company) of Borrower, as applicable, shall be a corporation or an Acceptable LLC constituting a “Principal” hereunder whose sole asset is its interest in Borrower. Each Principal (i) will at all times comply with each of the covenants, terms and provisions contained in Section 5.1(a)(iii) - (vi) (inclusive) and (viii) – (xx) (inclusive) and, if such Principal is an Acceptable LLC, Section 5.1(c) and (d) hereof, as if such representation, warranty or covenant was made directly by such Principal; (ii) will not engage in any obligation business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower; (iv) will at all times continue to own no less than a 1.0% direct equity ownership interest in Borrower; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause Borrower to comply with the provisions of this Section 5.1.
(c) In the event Borrower or Principal is an Acceptable LLC, the limited liability company agreement of Borrower or Principal (as applicable) (the “LLC Agreement”) shall provide that (i) upon the occurrence of any personevent that causes the last remaining member of Borrower or Principal (as applicable) (“Member”) to cease to be the member of Borrower or Principal (as applicable) (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Principal (as applicable) and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, including an Affiliate;
or (xxiiiB) fail to allocate fairly the resignation of Member and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee the admission of an Affiliate;
additional member of Borrower or Principal (xxivas applicable) fail to use separate invoices in accordance with the terms of the Loan Documents and checks bearing its own name;
(xxv) pledge its assets for the benefit LLC Agreement), any natural person duly designated under the applicable organizational documents shall, without any action of any other Person, other than Person and simultaneously with respect the Member ceasing to payment be the member of the indebtedness Borrower or Principal (as applicable) automatically be admitted to the Secured Parties hereunder;
Borrower or Principal (xxvias applicable) as a member with a 0% economic interest (A) fail at any time to have at least one (1) independent member (the “Special Member”) which and shall be continue Borrower or Principal (as applicable) without dissolution and (ii) Special Member may not resign from Borrower or Principal (as applicable) or transfer its rights as Special Member unless a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who successor Special Member has prior experience been admitted to Borrower or Principal (as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed applicable) as a Special Member in accordance with requirements of Delaware or Maryland law (as applicable). The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower or Principal (as applicable) upon the admission to Borrower or Principal (as applicable) of the first substitute member, (ii) Special Member shall be a member of Borrower or Principal (as applicable) that has no interest in the profits, losses and is not, capital of Borrower or Principal (as applicable) and has never beenno right to receive any distributions of the assets of Borrower or Principal (as applicable), (iii) pursuant to the applicable provisions of the limited liability company act of the State of Delaware or Maryland (as applicable, the “Act”), Special Member shall not be required to make any capital contributions to Borrower or Principal (as applicable) and will shall not while serving receive a limited liability company interest in Borrower or Principal (as applicable), (iv) Special Member, in its capacity as Special Member beMember, any of the following: may not bind Borrower or Principal (as applicable) and (v) a member, partner, equityholder, manager, director, officer or employee except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower or any Principal (as applicable) including, without limitation, the merger, consolidation or conversion of its respective equityholders Borrower or Affiliates Principal (other than as a applicable). In order to implement the admission to Borrower or Principal (as applicable) of Special Member, Special Member of shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower or an Affiliate Principal (as applicable) as Special Member, Special Member shall not be a member of Borrower or Principal (as applicable).
(d) The LLC Agreement shall further provide that (i) upon the Borrower occurrence of any event that is not in causes the direct chain of ownership of the Borrower and that is required by a creditor Member to cease to be a single purpose bankruptcy remote entity); member of Borrower or Principal (x) a creditor, supplier or service provider (including provider of professional servicesas applicable) to the fullest extent permitted by law, the personal representative of Member shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of Member in Borrower or any of its equityholders Principal (as applicable) agree in writing (A) to continue Borrower or Affiliates Principal (other than a nationally recognized company that routinely provides professional Special Members as applicable) and other corporate services (B) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower or any Principal (as applicable) effective as of its equityholders the occurrence of the event that terminated the continued membership of Member in Borrower or Affiliates in the ordinary course of business); Principal (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vas applicable), (x) ii)any action initiated by or (y) above; brought against Member or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member under any Creditors Rights Laws shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the not cause Member or Special Member to cease to be a member of a “special purpose entity” affiliated with Borrower or Principal (as applicable) and upon the occurrence of such an event, the business of Borrower or Principal (as applicable) shall be qualified to serve as a continue without dissolution and (iii) each of Member and Special Member waives any right it might have to agree in writing to dissolve Borrower or Principal (as applicable) upon the occurrence of the Borrower, provided that the fees that such individual earns from serving as any action initiated by or brought against Member or Special Member under any Creditors Rights Laws, or the occurrence of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for an event that year;
(xxvii) fail causes Member or Special Member to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings cease to be adjudicated bankrupt a member of Borrower or insolvent, Principal (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawapplicable).
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
: (i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
, including, without limitation, capital contributions which it may receive from the Equityholder; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
; (iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
; BUSINESS.32224493.6 108 (v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
; (vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Transaction Documents; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such Person;
Person and (d) as otherwise permitted under the Transaction Documents; (xi) seek its dissolution or winding up in whole or in part;
; (xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
; (xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
; (xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xvi) 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, or make an assignment for the benefit of creditors;
; BUSINESS.32224493.6 109 (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
; (xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the Equityholder so long as the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
consolidated financial statements; (xix) fail to pay its own liabilities and expenses only out of its own funds;
; (xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
; (xxi) acquire the obligations or securities of its Affiliates or members;
stockholders; (xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
; (xxivxxiii) fail to use separate invoices and checks bearing its own name;
; (xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;; (xxv)
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in or the ordinary course of its businessEquityholder or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the Equityholder or an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent LLC Agreement; (5%) of such individual’s annual income for that year;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and (axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ ▇▇▇, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Guardian IV BDC, L.L.C.)
Special Purpose Entity. The Borrower has not done the following and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Deal Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Deal Agent;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principal or other Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personany of its principal or other Affiliates;
(xi) seek its dissolution or winding winding-up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or an Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included Person (except its parent in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, employees (if any) in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) which shall on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be a natural Person approved by an independent director or manager of another special purpose entity affiliated with the Administrative Agent in its sole discretionServicer, which member mustand (B) has, in each such instance, be a Person who has (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as a Special Member and is notadvisory, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate placement services to the Borrower borrowers or any issuers of its equityholders securitization or Affiliates in the ordinary course of business); (y) a family member of any such memberstructured finance instruments, partner, equityholder, manager, director, officer, employee, creditor, supplier agreements or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearsecurities;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralthe 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) Reserved;
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (aA) the Collateral or Receivables and related assets under the Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure (other than in accordance with the provisions hereofincluding through any divisional or divisive merger), without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause the Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders);
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in World Acceptance’s consolidated financial statements for Tax purposes and (b) other contracts or agreements for consolidated reporting purposes pursuant to generally accepted accounting principles and subject to a footnote clarifying that such assets are upon terms not available to the general creditors of World Acceptance and conditions that are commercially reasonable and that would be available have been pledged to Administrative Agent on an arms-length basis with third parties other than such Personbehalf of Lenders;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such World Acceptance’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of pay or cause to be paid from its contemplated business operations or to pay own funds the salaries of its own employees, if any; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearWorld Acceptance;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) fail to file its own tax returns separate from those replace or appoint any Person as an Independent Manager of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is (A) who does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.satisfy the definition of an Independent Manager and
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(ia) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iib) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iiic) merge into or consolidate with any Person or dissolve, divide, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(ivd) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(ve) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Portfolio Investments, Cash and Cash Equivalents) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Loans owed to the Lenders and a termination of all the Commitments;
(viiih) fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents and (bii) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such PersonAffiliate;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Parent or any other Person;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvip) 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, or make an assignment for the benefit of creditors;
(xviiq) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiir) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixs) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxit) acquire the obligations or securities of its Affiliates or members;
(xxiiu) guarantee any obligation of any person, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivw) fail to use separate invoices and checks bearing its own name;
(xxvx) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Ai) fail at any time to have at least one (1) independent member manager (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member Independent Manager must, in each such instance, be a Person natural person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience experience, and who is provided by Cogency Global Inc., CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Membersindependent managers, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members independent managers and other corporate services in the ordinary course Ordinary Course of its businessBusiness, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member an independent manager or special member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than an employee of a nationally recognized company that routinely provides professional Special Members independent managers and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course Ordinary Course of businessBusiness); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (Bii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member Independent Manager shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member independent manager or special member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member independent manager of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiz) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxviiiaa) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law; or
(bb) fail to comply with the special purpose entity requirements set forth in this Section 8.1.26 such that ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC or another law firm reasonably acceptable to the Agent could no longer render a substantive nonconsolidation opinion with respect to Borrower.
Appears in 1 contract
Sources: Loan and Security Agreement (Flat Rock Capital Corp.)
Special Purpose Entity. The Borrower This Section 9.14 is being adopted to comply with certain provisions necessary to qualify the Company as a “special purpose” entity and in connection therewith, notwithstanding anything to the contrary in this Agreement or in any other document governing the formation, management or operation of the Company, until such time as the outstanding principal balance of the Loan has not been paid in full, the Members covenant and agree that the Company has not, and shall not:
(ia) engage in any business or activity other than (i) the purchaseacquisition, receipt development, ownership, leasing and management of Collateral, the transfer and pledge of Collateral pursuant to the terms maintenance of the Transaction DocumentsHotel, and entering into financing for any of the entry into foregoing, and activities incidental thereto and (ii) to own the performance under the Transaction Documents and such other TRS SUB including all activities as are incidental thereto;
(iib) acquire or own any material assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower Hotel and the performance of its obligations under the Transaction Documentsinterest in TRS SUB;
(iiic) merge into or consolidate with any Person person or entity or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(ivd) (i) fail to observe its organizational formalities or preserve its existence as an entity duly organizedformed, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, and qualification to do business in the State of California, or (ii) without the prior written consent of the Administrative Agentits lender, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesthis Section 9.14;
(ve) form, acquire or own any Subsidiary, own any equity interest in any subsidiary other entity, than TRS SUB or make any Investment in investment in, any Person (other than Permitted Investments) TRS SUB without the prior written consent of the Administrative AgentLender;
(vif) commingle its assets with the assets of any of its members, general partners, Affiliates, principals or of any other PersonPerson or entity, participate in a cash management system (other than pursuant to the Hotel Management Agreement) with any other entity or Person or fail to use its own separate stationery, invoices and checks;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation)indebtedness, other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentsindebtedness permitted by its then applicable lender;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its recordsrecords (including financial statements), books of account and bank accounts separate and apart from those of the members, general partners, principals and Affiliates, as the case may be, the Affiliates of a member, general partner or principal of the Company, as the case may be, and any other Person, (ii) permit its assets or liabilities to be listed as assets or liabilities on the financial statement of any other Person or (iii) include the assets or liabilities of any other Person on its financial statements; except for consolidated financial statements which contain a note indicating that the Company’s separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;
(xi) enter into any contract or agreement with any Personmember, general partner, principal or Affiliate of the Company, as the case may be, or any member, general partner, principal or Affiliate thereof other than the Hotel Management Agreement, the Operating Lease, those certain side letters each dated as of the date hereof between FHR and TRS SUB (and excluding any other business management services agreement with an Affiliate, provided that (i) the manager, or equivalent thereof, under such agreement holds itself out as an agent of the Company, and (ii) the agreement meets the standards set forth in the respective loan agreement or other security document of a lender following this parenthetical), except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany member, general partner, principal or Affiliate of the Company, or any member, general partner, principal or Affiliate thereof;
(xij) seek its the dissolution or winding up in whole whole, or in part, of the Company;
(xiik) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Company, or any member, general partner, principal or Affiliate thereof or any other Person;
(xiiil) except as provided in this Agreement, guarantee, guarantee or become obligated for, for the debts of any other Person or hold itself out to be responsible for the debt debts of another Person, other than with respect to the obligations set forth in any loan agreement or other security document of a lender or any guaranty of the Hotel Management Agreement;
(xivm) make any loans or advances to any third party, including any member, general partner, principal or Affiliate of the Company, or any member, general partner, principal or Affiliate thereof, and shall not acquire obligations or securities of any member, general partner, principal or Affiliate (other than TRS SUB);
(n) fail to file its own tax returns or be included on the tax returns of any other Person except as required by law;
(o) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name or a name franchised or licensed to it by a hotel manager or hotel franchisor, and not as a division or part of any other entity in order not (ai) to knowingly and intentionally mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it the Company is responsible for the debts of any third party (including any member, general partner, principal or Affiliate of its principals the Company or Affiliates)any member, general partner, principal or Affiliate thereof) other than TRS SUB;
(xvp) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations when there is sufficient cash flow from the leasing of the Hotel to do so;
(q) hold itself out as or be considered as a department or division of (i) any general partner, principal, member or Affiliate of the Company, (ii) any Affiliate of a general partner, principal or member of the Company, or (iii) any other Person;
(r) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(s) pledge its assets for the benefit of any other Person other than with respect to the obligations under any loan agreement or other security document of any lender;
(t) fail to maintain a sufficient number of employees in light of its contemplated business operations;
(xviu) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by creditors without the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness affirmative vote of the Borrower from such Affiliate independent director and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and of all other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or managing members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing hold its assets in its own name;; and
(xxvw) pledge have any of its assets for the benefit of any other Personobligations guaranteed by an Affiliate, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at obligations under any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager loan agreement or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member security document of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawlender.
Appears in 1 contract
Sources: Membership Interest Agreement (Carey Watermark Investors Inc)
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in -95- connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length arm’s‑length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower and Borrower, the Related Fund Seller or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or members;
(xxii) guarantee any obligation of any personPerson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Global Securitization Services or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower Borrower, the Seller or the Collateral Manager and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviiixxix) fail to file its own tax Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax Tax purposes and is not required to file tax Tax returns under applicable lawApplicable Law, and pay any taxes Taxes required to be paid under applicable lawApplicable Law.
Appears in 1 contract
Sources: Loan and Security Agreement (Oaktree Strategic Income II, Inc.)
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;; 111
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);; 112
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.113
Appears in 1 contract
Special Purpose Entity. The Borrower shall not (nor has not and shall not:the Borrower taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets from UACC under the Purchase Agreement, the transfer and pledge of Receivables and other Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets from UACC under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreementFormation Documents or other governing documents, as applicable, or fail to observe limited liability company corporate formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viii) become not Solvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personits Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or UACC, as applicable, or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person, except as expressly provided in the Basic Documents;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included a direct or indirect ownership interest in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and (other than in accordance with the Trust Agreement), unless the Borrower delivers to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetAdministrative Agent an acceptable non-consolidation opinion;
(xixxx) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (Bxxv) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute include provisions in the aggregate less than five percent (5%) of such individual’s annual income for Trust Agreement that year;
(xxvii) fail to provide that the unanimous consent of all members (including require the consent of the Borrower’s Special Member) Owner Trustee is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state State law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxvi) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents;
(xxvii) not take or refrain from taking, as applicable, each of [***], dated the Closing Date;
(xxviii) elect or otherwise permit the Borrower to be treated as an entity taxable as a corporation for U.S. federal income tax purposes; and
(xxix) fail to file maintain separate financial statements, showing its own tax returns assets and liabilities separate and apart from those of any other Person, except to or have its assets listed on the extent financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliates if (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower is treated as a “disregarded entity” for tax purposes from such Affiliates and is to indicate that the Borrower’s assets and credit are not required available to file tax returns under applicable law, satisfy the debts and pay obligations of such Affiliates or any taxes required to other Person and (b) such assets shall also be paid under applicable lawlisted on the Borrower’s own separate balance sheet.
Appears in 1 contract
Sources: Warehouse Agreement (Vroom, Inc.)
Special Purpose Entity. The Borrower has Other than as required or permitted by the Transaction Documents or the SkyMiles Agreements, the SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt receipt, management and management sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and SkyMiles Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents and SkyMiles Agreements to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Indenture (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Discharge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under Section 4.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any equity interest Equity Interests in any other entity, or make any Investment in any Person (other than Permitted Investments) without to the prior written consent of the Administrative Agentextent permitted in its memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Senior Secured Parties hereunder under this Indenture or in conjunction with a repayment repurchase or redemption of all Advances or a portion of the Notes owed to the Lenders Holders, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and a termination of all (iv) ordinary course contingent obligations under or any terms thereof related to the CommitmentsSkyMiles Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) SkyMiles Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and Delta and/or its Subsidiaries substantially consistent with Delta’s arrangements with its other Subsidiaries that (w) terminate upon such SPV Party ceasing to be a Subsidiary of Delta, (x) do not involve the payment of cash to or from such SPV Party, (y) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bz) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture, (v) intercompany agreements for loans from Loyalty Co to Delta permitted under Section 4.22, and (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person;, (y) contain non-petition covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture and (z) contain non-recourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture.
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identity identities of any SPV Party, on the Borrower one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except as provided in this Agreementpursuant to the Transaction Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Affiliate Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Affiliate Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to maintain a sufficient number of maintain, hire or employ any individuals as employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxit) acquire the obligations or securities of issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party or (ii) intercompany loans permitted under Section 4.22);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxvv) pledge its assets for to secure the benefit obligations of any other Person, Person other than with respect to payment of the indebtedness pursuant to the Secured Parties hereunderNotes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxvi) (Aw) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience Independent Directors as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is are required by a creditor to be a single purpose bankruptcy remote entity); pursuant Section 4.09;
(x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxviiiy) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for U.S. federal and applicable state and local income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawpurposes.
Appears in 1 contract
Sources: Indenture (Delta Air Lines, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
During the time the Note remains outstanding, Mortgagor (i) will not engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant unrelated to the terms of the Transaction DocumentsPremises, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own will not have any assets other than (a) those related to the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
Premises, (iii) merge into will not engage in, seek or consolidate with consent to any Person dissolution, winding up, liquidation, consolidation or dissolvemerger, terminate and, except as otherwise expressly permitted by the Loan Documents, will not engage in, seek or liquidate in whole or in partconsent to any asset sale, transfer of ownership or otherwise dispose of all equity interests, or substantially all amendment of its assets organizational documents (other than in accordance with articles of organization or incorporation, certificate of limited partnership, operating agreement or bylaws, as the provisions hereofcase may be), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) will not fail to correct any known misunderstandings misunderstanding regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or AffiliatesMortgagor, (bv) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and will not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness itself or to the Secured Parties hereunder;
(xxvi) any other entity in which it has a direct or indirect legal or beneficial ownership interest (A) fail at voluntarily file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, relief under any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) laws relating to the Borrower relief from debts or any the protection of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business)debtors generally; (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) voluntarily seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, such entity or all or any portion of such entity’s properties; (eC) make any assignment for the benefit of the Borrowersuch entity’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, ; or (gD) take any action in furtherance of any of the foregoing; or
that might cause such entity to become insolvent, (xxviiivi) fail to file will maintain its own tax returns financial statements, accounting records, and other entity documents separate from any other person or entity, (vii) will maintain its books, records, resolutions and agreements as official records, (viii) has not commingled and will not commingle its funds or assets with those of any other Personperson or entity, (ix) has held and will hold its assets in its own name, (x) will conduct its business in its name, (xi) will pay its own liabilities out of its own funds and assets, (xii) will observe all entity formalities, (xiii) has maintained and, except as otherwise expressly permitted or required by the Loan Documents, will maintain an arms-length relationship with its affiliates, (xiv) will have no indebtedness other than as evidenced by the Loan Documents, indebtedness secured by the Junior Lien, and commercially reasonable unsecured trade payables in the ordinary course of business relating to the extent ownership and operation of the Premises that are paid within sixty (60) days of the Borrower is treated date incurred, (xv) except as expressly permitted or required by the Loan Documents, will not assume or guarantee or become obligated for the debts of any other person or entity (except for guaranties secured by the Junior Lien) or hold out its credit as being available to satisfy the obligations of any other person or entity, except as evidenced by the Loan Documents, (xvi) will not acquire obligations or securities of its owners (members, partners, shareholders), (xvii) will allocate fairly and reasonably shared expenses, including, without limitation, shared office space and use separate stationery, invoices and checks, (xviii) will not pledge its assets for the benefit of any other person or entity (except with respect to the Junior Lien), (xix) will hold itself out and identify itself as a “disregarded separate and distinct entity under its own name and not as a division or part of any other person or entity” for tax purposes , (xx) will not make loans to any person or entity, (xxi) will not identify its owners (members, partners, shareholders) or any affiliates of any of them as a division or part of it, (xxii) except as otherwise expressly permitted or required by the Loan Documents, will not enter into or be a party to, any transaction with its owners (members, partners, shareholders) or its affiliates except in the ordinary course of its business and is not required on terms which are intrinsically fair and are no less favorable to file tax returns under applicable lawit than would be obtained in a comparable arms-length transaction with an unrelated third party, (xxiii) will pay the salaries of its own employees from its own funds, (xxiv) will endeavor in good faith to maintain adequate capital in light of its contemplated business operations, and pay any taxes required to be paid under applicable law(xxv) will continue (and not dissolve) for so long as a solvent managing member, partner or shareholder exists.
Appears in 1 contract
Sources: Mortgage, Security Agreement and Fixture Filing (HC Government Realty Trust, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than (x) the transactions contemplated by that certain Indenture (as defined in the Repo Termination Agreement) and related Transaction Documents (as defined in the Indenture), (y) the entry into the Repo Termination Agreement, and (z) the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Indenture (as defined in the Repo Termination Agreement) and the related Transaction Documents and (as defined in the Indenture), (b) the Repo Termination Agreement, (c) the other Transaction Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (d) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such PersonPerson and (e) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person (other than for tax purpose) or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) the Equityholder so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate the Equityholder or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;[reserved]
(xxviixxvi) fail to provide that the unanimous consent of all its members (including the consent of the Borrower’s Special Member) or managers is required for the Borrower to (a) institute proceedings to be adjudicated adjudicated, bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition or answer seeking or consent to reorganization reorganization, arrangement, composition, readjustment or similar relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, (g) file an answer or other pleading admitting or failing to contest the material litigation of a petition filed in any proceeding of this nature, or (gh) take any action in furtherance of any of the foregoing; orand
(xxviiixxvii) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of W▇▇▇▇ & Case LLP, except to dated as of the extent that date hereof upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower and Borrower, the Related Fund Seller or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or members;
(xxii) guarantee any obligation of any personPerson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Global Securitization Services or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower Borrower, the Seller or the Collateral Manager and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviiixxix) fail to file its own tax Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax Tax purposes and is not required to file tax Tax returns under applicable lawApplicable Law, and pay any taxes Taxes required to be paid under applicable lawApplicable Law.
Appears in 1 contract
Sources: Loan and Security Agreement (Fifth Street Senior Floating Rate Corp.)
Special Purpose Entity. The Borrower has not Unless otherwise consented to by the Agent in writing, and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreementthe Facility Documents, change its legal structurethe REO Subsidiary shall be a Special Purpose Entity that shall (a) own no assets, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest will not engage in any other entitybusiness, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets and transactions specifically contemplated by the Facility Documents and sales, purchases, distributions or contributions of any of its Affiliates, or of any other Person;
assets made in connection with assets that are no longer subject to a Transaction; (viib) not incur any IndebtednessIndebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than Indebtedness pursuant to the Secured Parties hereunder Facility Documents; (c) not make any loans or in conjunction with a repayment advances to any Affiliate or third party, and shall not acquire obligations or securities of all Advances owed to the Lenders and a termination of all the Commitments;
its Affiliates; (viiid) fail to pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its assets as own assets; (e) comply with the provisions of its organizational documents; (f) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents, or suffer same to be amended, modified or otherwise changed, without the Agent’s prior written consent which shall become due;
not be unreasonably withheld; (ixg) fail to maintain all of its recordsbooks, books of account records and bank accounts financial statements separate and apart from those of any other Person;
its Affiliates (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would such financial statements may be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out consolidated to the public extent consolidation is required under GAAP or as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity matter of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (ai) appropriate notation shall be made on such consolidated financial statements if prepared to indicate the separateness of the Borrower REO Subsidiary from such Affiliate and to indicate that the BorrowerREO Subsidiary’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and Person; (bii) such assets shall also be listed on the BorrowerREO Subsidiary’s own separate balance sheet;
sheet if prepared and (xixiii) fail to pay the REO Subsidiary shall file its own liabilities tax returns if filed, except to the extent consolidation is required or permitted under applicable law); (h) be, and expenses only at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), 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 own funds;
Affiliates as a division or part of the other; (xxi) fail not enter into any transactions with any Affiliates except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s length transaction; (j) maintain a sufficient number of employees, if any, adequate capital in light of its contemplated business operations purpose, transactions and liabilities; (k) not engage in or to pay the salaries suffer any dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its own employees, if any;
properties and assets to any Person (xxiexcept as contemplated herein); (l) acquire the obligations not commingle its funds or securities of its Affiliates or members;
(xxii) guarantee any obligation other assets with those of any personAffiliate or any other Person and shall maintain its properties and assets in such manner that it would not be costly or difficult to identify, including an Affiliate;
segregate or ascertain its properties and assets from those of others; (xxiiim) fail not institute against, or join any other Person in instituting against the REO Subsidiary, any proceedings of the type referred to allocate fairly and reasonably in the definition of “Insolvency Event” hereunder or seek to substantively consolidate the REO Subsidiary in connection with any overhead expenses that are shared Insolvency Event with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
respect to the REO Subsidiary; (xxivn) fail will not hold itself out to use separate invoices and checks bearing its own name;
(xxv) pledge its assets be responsible for the benefit debts or obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (xo) a creditornot form, supplier acquire or service provider hold any Subsidiary or own any equity interest in any other entity; and (including provider of professional servicesp) not pledge its assets to secure the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member obligations of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Master Repurchase Agreement (Finance of America Companies Inc.)
Special Purpose Entity. The Borrower Issuer has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt and management of Collateral, Contract Assets from the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents Originator hereunder and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Contract Assets from the Originator hereunder and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsIssuer;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreementCertificates of Formation, or fail to observe limited liability company entity formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentPerson;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person, other than to the extent described in Section 7.01;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to indebtedness created hereunder except for trade payables in the Secured Parties hereunder or in conjunction with ordinary course of its business, provided that such debt is not evidenced by a repayment of all Advances owed to the Lenders note and a termination of all the Commitmentspaid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Issuer or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixix) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliatesaffiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any ownership interest in the Issuer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersequity holders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yeartwo Independent Directors;
(xxviixxix) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower Issuer to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerIssuer, (eE) make any assignment for the benefit of the Borrower’s Issuer's creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, except to delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Transfer and Servicing Agreement (Greatamerica Leasing Receivables 2002-1 LLC)
Special Purpose Entity. The At all times on and after the Closing Date through (but not including) Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt receipt, management and management sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsDocuments including, without limitation, capital contributions which it may receive from the Equity holder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, limited liability company agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller or its Affiliates, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m) and Section 6.2(n)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity identities of the Borrower Borrower, on the one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except as provided in pursuant to this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent to the filing of any petitionpetition as to the Borrower, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statementsbooks and records, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) Affiliates so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxv) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Company or Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the LendersCorporation, in each case that is not an Affiliate of the Borrower Borrower, the Seller or the Collateral Manager and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members Independent Managers and other corporate services to the Borrower Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member Independent Manager of affiliates Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvi) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are complied with;
(xxvii) fail to provide that the unanimous consent of all members managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian Collateral Agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is or to the extent that such failure does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconstitute a breach of Section 5.1(k).
Appears in 1 contract
Sources: Loan and Security Agreement (Kayne Anderson BDC, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (d) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;; USActive 55525956.12 72
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the Equityholder so long as the separateness of the Borrower from such Affiliate the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in or the ordinary course of its businessEquityholder or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the USActive 55525956.12 73 Borrower, the Equityholder or an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) elect for the Borrower to be treated, or otherwise become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe Delaware limited liability company formalities;
(vvi) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in partAffiliates;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixviii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate invoices and checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxvii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxviii) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxix) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxx) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxi) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower has Other than as required or permitted by the Transaction Documents or the Mileage Plan Agreements, the SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt receipt, management and management sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and Mileage Plan Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents and Mileage Plan Agreements to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Indenture (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Discharge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under Section 4.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any equity interest Equity Interests in any other entity, or make any Investment in any Person (other than Permitted Investments) without to the prior written consent extent permitted in its memorandum and articles of association and the Notes Documents (it being understood that each SPV Party shall only be permitted to form and thereafter own one or more Subsidiaries that are SPV Parties or will become SPV Parties upon satisfaction of the Administrative Agentrequirements set forth in clause (3), (4) and (5) of the proviso in the definition of “Permitted Loyalty Subsidiary” within the time periods set forth in Section 4.16(l));
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Senior Secured Parties hereunder under this Indenture (including Additional Notes) or in conjunction with a repayment repurchase or redemption of all Advances or a portion of the Notes owed to the Lenders Holders, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and a termination of all (iv) ordinary course contingent obligations under or any terms thereof related to the CommitmentsMileage Plan Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) Mileage Plan Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and Alaska and/or its Subsidiaries substantially consistent with Alaska’s arrangements with its other Subsidiaries that (w) terminate upon such SPV Party ceasing to be a Subsidiary of Alaska, (x) do not involve the payment of cash to or from such SPV Party, (y) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bz) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture, (v) intercompany agreements for loans from Loyalty Co to Alaska permitted under Section 4.22, and (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person;, (y) contain non-petition covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture and (z) contain non-recourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture.
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identity identities of any SPV Party, on the Borrower one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except as provided in this Agreementpursuant to the Transaction Documents, the Mileage Plan Agreements, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents or the Mileage Plan Agreements));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents and the Mileage Plan Agreements), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, which may be unaudited, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Affiliate Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Affiliate Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to maintain a sufficient number of maintain, hire or employ any individuals as employees, if any, ; provided that the SPV Parties are not prohibited or limited in light of its contemplated business operations or to pay the salaries of its own employees, if anyany manner from having directors and officers;
(xxit) acquire the obligations or securities of issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party or (ii) intercompany loans permitted under Section 4.22);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxvv) pledge its assets for to secure the benefit obligations of any other Person, Person other than with respect to payment of the indebtedness pursuant to the Secured Parties hereunderNotes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxvi) (Aw) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience Independent Directors as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is are required by a creditor to be a single purpose bankruptcy remote entity); pursuant Section 4.09;
(x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization reorganization, restructuring, liquidation (including provisional liquidation), winding up or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, restructuring officer, liquidator, provisional liquidator, assignee, trustee, sequestrator, custodian collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxviiiy) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for U.S. federal and applicable state and local income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawpurposes.
Appears in 1 contract
Sources: Indenture (Alaska Air Group, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationeach Lender;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Personany principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or an Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) which shall on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be a natural Person approved by an independent director or manager of another special purpose entity affiliated with the Administrative Agent in its sole discretionServicer, which member mustand (B) has, in each such instance, be a Person who has (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as a Special Member and is notadvisory, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate placement services to the Borrower borrowers or any issuers of its equityholders securitization or Affiliates in the ordinary course of business); (y) a family member of any such memberstructured finance instruments, partner, equityholder, manager, director, officer, employee, creditor, supplier agreements or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearsecurities;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of Skadden, except to Arps, Slate, Meag▇▇▇ & ▇lom ▇▇▇, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length arms‑length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp US Private Credit BDC II)
Special Purpose Entity. The Borrower Seller has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Collateral and management of Collateralrelated assets from the Originator under the Sale Agreement, the transfer and pledge sale of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsSeller;
(iii) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date), terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) except for the Capital Contribution Agreement, enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of Seller, CS Funding VII, the Borrower Originator and the Related Fund CapitalSource Finance LLC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person director who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (a) the Servicer, (b) the Seller, (c) any principal of the Servicer, (d) any Affiliate of the Servicer, or (z) a Person that controls (whether directly, indirectly or otherwisee) any Affiliate of any principal of the Servicer (van “Independent Director”), (x) ; provided that such Independent Director may be an independent director of another special purpose entity affiliated with the Servicer or (y) above; its Affiliates or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of directors (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearIndependent Director);
(xxviixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all members directors (including the consent of the Borrower’s Special Member) is required for the Borrower to Independent Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxx) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for tax purposes Third Amendment and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawRestatement Effective Date.
Appears in 1 contract
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) fail to correct enter into any known misunderstandings regarding the separate identity of the Borrower and the Related Fund contract or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person agreement with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to the extent those that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to would be paid under applicable law.available on an arm’s-length basis with third parties other than its Affiliates;
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents, (ii) with respect to any Revolving Loan or Delayed Draw Loan owned by the Secured Parties hereunder or Borrower, obligations to fund under the terms of the Underlying Instruments and (iii) Indebtedness in conjunction with a repayment of all Advances owed to the Lenders Obligations and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements on customary terms relating to the acquisition, origination and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s 's assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s 's own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “"Special Member”") which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent directora Special Member, independent manager or independent member with at least three years of employment experience and who is provided by Citadel SPV, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its their respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (vw) above by reason of being the Special Member of a “"special purpose entity” " affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, Borrower provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s 's annual income for that year; provided, further, that Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its reasonable discretion upon the death, resignation or incapacitation of the current Special Member;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s 's Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s 's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid by it under applicable law.
Appears in 1 contract
Sources: Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp)
Special Purpose Entity. The Until the Debt has been paid in full, Borrower has not hereby represents, warrants and covenants that it is and shall continue to be a Special Purpose Entity. A “Special Purpose Entity” means a corporation, limited liability company or partnership, which (a) does not have and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than, with respect to Borrower and, if Borrower is a partnership, each of its Special Purpose Entity general partners, the following: (i) the Debt, (ii) trade payables and capital expenditures incurred in the ordinary course of the business of owning and operating the Property, provided that such trade payables and capital expenditures (A) shall not be evidenced by a note, (B) shall be paid within sixty (60) days of the date incurred and (C) shall not exceed, in the aggregate, three percent (3%) of the outstanding principal balance of the Loan at any one time, (iii) real estate taxes and assessments, and (iv) obligations under equipment leases and purchase money financing arrangements entered into in connection with the leasing or purchase of equipment reasonably required in connection with the ownership and operation of the Property, provided that the sum of the purchase price (or in the case of leased equipment, the amount that would have been paid in order to purchase, instead of lease) for such equipment shall not exceed, in the aggregate, one percent (1%) of the outstanding principal balance of the Loan at any one time; (b) if such entity is a limited liability company, has as its manager or managing member a Special Purpose Entity that owns at least one half percent (.50%) of the membership interests of the limited liability company; (c) if such entity is a partnership, has a general partner of such entity that is a Special Purpose Entity that owns at least one percent (1.0%) of the partnership interests in such partnership, (d) has Charter Documents that provide that such entity will not:: (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets or the assets of any entity in which it has a direct or indirect interest, except as otherwise provided in the Loan Documents; (3) engage in any other business activity, or amend its organizational documents with respect to the matters set forth in this Section 4.2 without the consent of the Lender; or (4) without the affirmative vote of all of the directors of the corporation or directors or managers of a limited liability company (that is such entity, the managing member or a general partner of such entity), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest; and (e) at all times from and after June 30, 1997 (and to B▇▇▇▇▇▇▇’s knowledge with respect to the representations in clauses (i), (ii) and (iii) below, from and after the date of its inception):
(i) engage in any has been, and continuing from and after the date hereof shall remain, organized solely for the purpose of (i) acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property, obtaining the Loan from Lender and transacting lawful business or activity other than that is incident, necessary and appropriate to accomplish the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms foregoing; (ii) acting as a general partner of the Transaction Documents, partnership that owns the entry into and Property; or (iii) acting as a managing member of the performance under general partners of the Transaction Documents and such other activities as are incidental theretopartnership that owns the Property;
(ii) acquire has not engaged in, and continuing from and after the date hereof shall not engage in, any business or own activity unrelated to (i) the acquisition, development, ownership, management or operation of the Property, (ii) acting as a member and or manager of the limited liability company that is a general partner of the partnership that owns the Property; or (iii) acting as a general partner of the partnership that owns the Property;
(iii) has not owned, and continuing from and after the date hereof shall not own, any material assets other than (ai) the Collateral or Property, (bii) such incidental property Personal Property as may be necessary for the operation of the Borrower and Property, (iii) the performance membership interest in the limited liability company that is a general partner of its obligations under the Transaction Documentspartnership that owns the Property; or (iv) the general partnership interest in the partnership that owns the Property;
(iiiiv) merge into has not engaged in, sought or consolidate with consented to, and continuing from and after the date hereof shall not engage in, seek or consent to, any Person dissolution, winding up, liquidation, consolidation, merger, or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose sale of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or transfer of its partnership or membership interests, or any stock or beneficial ownership of, any entity, except as permitted by under Section 8 of this Agreement, change its legal structure, or jurisdiction of formationagreement;
(ivv) fail to preserve has preserved, and continuing from and after the date hereof will preserve, its existence as an entity duly organized, organized and validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or formation and will not without the prior written consent of the Administrative AgentLender, amend, modify, terminate or fail to comply with the provisions of its operating agreement, articles of formation, partnership agreement or certificate of partnership, certificate of incorporation, by-laws or similar organizational documents, as the case may be (collectively, the “Charter Documents”), or consent to or suffer the amendment, modification, termination or breach of any of the Charter Documents, or amend, modify, terminate or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entitycomply with, or make consent or suffer the amendment, modification, termination or breach of any Investment Charter Documents of any entity in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agentwhich it owns an interest, in each case in such a manner as could reasonably jeopardize Borrower’s status as a bankruptcy remote entity;
(vi) has not owned, and continuing from and after the date hereof, shall not own or make any investment in, any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof or any fiduciary acting in such capacity on behalf of any of the foregoing (each, a “Person”) other than Borrower or a Special Purpose Entity owning an interest in Borrower;
(vii) has not commingled, and from and after the date hereof, shall not commingle its assets with the assets of any of its general partners, managing members, shareholders, Affiliates, principals or of any other Person;
(vii) incur any Indebtedness, secured person or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentsentity;
(viii) fail has maintained, and from and after the date hereof shall maintain, its financial statements, accounting records, bank accounts and other entity documents separate and apart from those of the partners, members, shareholders, principals and Affiliates of such entity, and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except that such entity’s financial position, assets, results of operations and cash flows may be included in the consolidated financial statements of an Affiliate of such entity; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay its the debts and liabilities from its assets as of the same shall become dueconsolidated entity nor constitute obligations of the consolidated entity;
(ix) fail has not entered into or been a party to, and from and after the date hereof, will not enter into or be a party to maintain any contract or agreement with any general partner, managing member, shareholder, principal or Affiliate of B▇▇▇▇▇▇▇, Guarantor or Indemnitor, or any general partner, managing member, shareholder, principal or Affiliate thereof, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available in a comparable arms-length basis with third parties;
(x) has maintained, and from and after the date hereof shall maintain, its recordsassets in such a manner that it will not be costly or difficult to segregate, books of account and bank accounts separate and apart ascertain or identify its individual assets from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in parthas not made, and from and after the date hereof shall not make any loans to any third party;
(xii) fail to correct any known misunderstandings regarding has held itself out and identified itself, and from and after the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or date hereof shall hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out and identify itself, to the public as a legal entity separate and distinct from any other Person or to conduct Person;
(xiii) has conducted, and from and after the date hereof shall conduct, its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it such entity is responsible for the debts of any third party (including any general partner, managing member, shareholder, principal or Affiliate of such entity, but not including any Special Purpose Entity limited partnership of which such entity is expressly permitted to be a general partner in accordance with the terms hereof);
(xiv) has remained, and from and after the date hereof intends to remain, solvent and which pay its principals debt and liabilities (including, as applicable, shared personnel and overhead expenses) from the revenue generated from the operation of the Property, provided that the foregoing covenant shall not require the general partners, shareholders or Affiliates)members, as the case may be, of such Special Purpose Entity to make any additional capital contributions to such Special Purpose Entity;
(xv) fail has maintained, and from and after the date hereof, will maintain, to maintain the extent available from the cash flow generated from the operation of the Property, adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations ;
(xvi) has filed, and from and after the date hereof, will file or consent its own tax returns, if any, as may be required under applicable law, to the extent such entity is (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division solely for tax purposes of another taxpayer, and has paid and will pay any petition, either voluntary or involuntary, taxes so required to take advantage of any be paid under applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorslaw;
(xvii) except as may be required or permitted by has allocated, and from and after the Code and regulations or other applicable state or local tax lawdate hereof, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to will allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxviii) fail has not failed, and from and after the date hereof shall not fail, to use correct any known misunderstanding regarding the separate invoices identity of such entity;
(xix) has held, and checks bearing from and after the date hereof shall hold, its assets in its own name and has conducted and will conduct its business in its own name;
(xx) has paid, and from and after the date hereof shall pay, its own liabilities and expenses;
(xxi) has observed, and from and after the date hereof shall observe, all corporate, limited liability company or partnership formalities, as applicable;
(xxii) has not assumed, guaranteed or become obligated for, and from and after the date hereof shall not assume or guarantee or become obligated for, the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except by virtue of its status as a Special Purpose Entity general partner of a Special Purpose Entity partnership that has been approved by Lender;
(xxiii) has not acquired, and from and after the date hereof, will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate;
(xxiv) has maintained and used, and from and after the date hereof will maintain and use, separate stationery, invoices and checks bearing its name;
(xxv) pledge has not pledged, and from and after the date hereof shall not pledge, its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businesshad, and which individual is duly appointed as a Special Member from and is not, and has never been, and after the date hereof will not while serving as Special Member behave, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or its obligations guaranteed by any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that such entity, except as is not contemplated in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearthis agreement;
(xxvii) fail to provide that has complied, and from and after the unanimous consent of date hereof will comply, with all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit material terms and provisions contained in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoingCharter Documents; orand
(xxviii) fail has conducted and operated, and from and after the date hereof shall conduct and operate, its business as presently conducted and operated and in compliance with the requirements of its Charter Documents. Notwithstanding the foregoing, the following operations and activities of Borrower and its Affiliates shall not be considered a violation of the covenants contained in this Section 4.2:
1. offering services to file residents of the Property through Affiliates of Borrower or other third parties for which fees and charges may be collected by Borrower or the Affiliate and paid to such Affiliate or third party, which may include, without limitation, cable and internet services, landscaping, snow removal, lease or sale of manufactured homes, and child care; provided that such Affiliates do not conduct their business in the name of Borrower and that any agreements between Borrower and its Affiliates relating to such services are on commercially reasonable terms similar to those of an arm’s length transaction;
2. depositing all gross revenue, whether cash, cash equivalents or similar assets, in an operating account maintained specifically for the Property (a “Property Operating Account”), after paying expenses of Borrower or causing SCOLP and/or Sponsor, to pay such expenses, and distributing such remaining cash to Sponsor, SCOLP, or at the direction of Sponsor or SCOLP, as applicable, to any other Affiliate of Borrower, and in any case, distributing such remaining cash that does not belong to the Borrower promptly to such entities;
3. paying all payables, debts and other liabilities arising from or in connection with the operation of the Property from the Property Operating Account, or causing SCOLP and/or Sponsor to pay such liabilities;
4. using ancillary assets in connection with the operation of the Property held in the name of Sponsor, SCOLP, or any of their Affiliates, such as vehicles and office and maintenance equipment;
5. treating the Property for all purposes as part of and within the portfolio of manufactured housing communities owned by SCOLP or its Affiliates, for marketing, promotion and providing information and reports to the public or as required by any applicable law; provided, however, that Borrower shall conduct business in its own tax returns separate from those name or its assumed or trade name; and/or
6. allocating general overhead and administrative costs incurred by Sponsor and SCOLP and/or other Affiliates of any other Person, except to the extent that the Borrower is treated as in a “disregarded entity” for tax purposes fair and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawequitable manner.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Sun Communities Inc)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and [Investcorp] Loan and Security Agreement conditions that are commercially reasonable and that would be available on an arms-length arms‑length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;; [Investcorp] Loan and Security Agreement
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to [Investcorp] Loan and Security Agreement the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp US Private Credit BDC II)
Special Purpose Entity. The Borrower has Other than as required or permitted by the Transaction Documents or the SkyMiles Agreements, the SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt receipt, management and management sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and SkyMiles Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents and SkyMiles Agreements to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Discharge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under Section 5.07(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any equity interest Equity Interests in any other entity, or make any Investment in any Person (other than Permitted Investments) without to the prior written consent of the Administrative Agentextent permitted in its memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (cii) any other Person;Priority Lien Debt,
(xviiiiii) fail to maintain separate financial statements, showing its assets any Junior Lien Debt and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (aiv) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other ordinary course contingent obligations of such Affiliate under or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness terms thereof related to the Secured Parties hereunderSkyMiles Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (Delta Air Lines, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, purchase and receipt of Loans and management of Collateralrelated assets, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral Loans and rights in the Related Property, (b) the Equity Interests in any REO Affiliate, (c) Equity Securities acquired (i) if a Loan is no longer an Eligible Loan or (bii) in connection with the exercise of remedies or with respect to any work out or restructuring of a Loan and (d) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amendmake any material amendment or modification, modify, or terminate or fail to comply with the material provisions of its operating agreementagreement (which includes the special purpose entity limitations), or fail to observe limited liability company formalities;
(v) form, acquire other than with respect to the Equity Interests in any REO Affiliate or own any SubsidiaryEquity Securities, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets or liabilities with the assets or liabilities of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentshereunder;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue (unless otherwise contested in good faith by appropriate proceedings); provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson in the reasonable judgment of the Borrower other than the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Originator or any other Person;
(xiii) except as provided in this Agreementmake any loan or advances to any third party, guarantee, become obligated forincluding any principal or Affiliate, or hold itself out to be responsible for evidence of indebtedness issued by any other Person (other than the debt of another PersonLoans, cash and Permitted Investments);
(xiv) fail either to file its own separate tax return or a consolidated federal income tax return with one or more of its Affiliates, except as may be permitted by the Code and regulations;
(xv) actively hold itself out to the public as such to represent that it is not a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business obligations of its size business and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included direct or indirect ownership interest in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from to the extent it has the ability to control the same, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheettransfer;
(xix) fail to pay its own liabilities and expenses only out the salaries of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyoperations;
(xxixx) acquire the obligations or securities of its Affiliates or membersstockholders except for obligations or securities of any REO Affiliate or any other Subsidiary permitted hereunder;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxii) fail to use separate invoices and checks bearing its own name;
(xxvxxiii) pledge or permit the pledge of its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxiv) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by Independent Manager or Independent Director acceptable to the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service providerAgent; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance selection or replacement of the Special Member shall require Independent Manager or Independent Director, as applicable, are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who otherwise satisfies board of managers (including the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve Independent Manager or Independent Director, as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearapplicable);
(xxviixxv) fail to provide in its operating agreement that the unanimous consent of all members managers, as applicable (including the consent of the Borrower’s Special MemberIndependent Manager or Independent Director, as applicable) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, and (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxviiixxvi) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of A▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Revolving Credit Agreement (NewStar Financial, Inc.)
Special Purpose Entity. The [Insert this section only if the Loan Commitment requires Borrower to be an SPE.]
(a) Borrower has not and shall will not:
(i) engage in any business or activity other than the purchaseownership, receipt operation and management of Collateral, the transfer and pledge of Collateral pursuant to the terms maintenance of the Transaction DocumentsProperty, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretoto them;
(ii) acquire or own any assets other than (aA) the Collateral or Property, and (bB) such incidental property Personal Property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsProperty;
(iii) merge into or consolidate with any Person Person, or dissolve, terminate or terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws Applicable Laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesorganizational documents;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entitysubsidiary, or make any Investment in investment in, any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentPerson;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness the Debt, unsecured trade payables and unsecured equipment leases (both of which must be incurred in the ordinary course of business relating to the Secured Parties hereunder or ownership and operation of the Property,) provided the same (x) do not exceed at any time in conjunction with the aggregate a repayment maximum amount of all Advances owed to ___ percent (__%) of the Lenders outstanding principal amount of the Note, and a termination of all (y) are paid within sixty (60) days after the Commitmentsdate incurred;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account account, bank accounts, financial statements, accounting records and bank accounts other entity documents separate and apart from those of any other Person;
(xix) enter into any contract or agreement with any Persongeneral partner, member, shareholder, principal or affiliate, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with unaffiliated third parties parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other than such Person;
(xi) seek its dissolution assume or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding guaranty the separate identity debts of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt debts of another any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person;
(xiii) fail to file its own tax returns (unless prohibited by Applicable Laws from doing so);
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) or fail to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of correct any third party (including any of known misunderstanding regarding its principals or Affiliates)separate identity;
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of 100% of the members of the board of directors of the SPE Component Entity including without limitation the Independent Director, (a) 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, (b) seek or consent to the appointment of a receiver, liquidator or any similar official, (c) take any action that might cause such entity to become insolvent, or (d) make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code fail to allocate shared expenses (including, without limitation, shared office space) and regulations or other applicable state or local tax lawto use separate stationery, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Personinvoices and checks;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employeesincluding, if anywithout limitation, in light of its contemplated business operations or to pay the salaries of its own employees, if any;) from its own funds; and
(xxixix) acquire the obligations or securities of its Affiliates partners, members, shareholders or members;other affiliates, as applicable.
(xxiib) guarantee any obligation [Insert this section only if the Loan Commitment requires an SPE Component Entity.] If Borrower is a partnership or limited liability company, each general partner in the case of any person, including a partnership or the managing member in the case of a limited liability company (each an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special MemberSPE Component Entity”) which of Borrower, as applicable, shall be a natural Person approved by the Administrative Agent corporation whose sole asset is its interest in its sole discretion, which member must, in Borrower and each such instance, be a Person who has prior experience as an independent director, independent manager or independent member SPE Component Entity (i) will at all times comply with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower covenants, terms and that provides professional Special Members provisions contained in Section 4.3(a)(iii) - (vi) and (viii) - (xix), as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other corporate services than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower, (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than unsecured trade payables incurred in the ordinary course of its businessbusiness related to the ownership of an interest in Borrower that (x) do not exceed at any one time $10,000, and which individual (y) are paid within sixty (60) days after the date incurred and (v) will cause Borrower to comply with the provisions of this Section 4.3.]
(c) [Insert this section only if the Loan Commitment requires an Independent Director (if the Borrower is a corporation, change the term SPE Component Entity in this section to “Borrower”).] The organizational documents of the SPE Component Entity shall provide that at all times there shall be at least one duly appointed as a Special Member and is notmember of the board of directors (an “Independent Director”) of the SPE Component Entity reasonably satisfactory to Lender who shall not have been at the time of such individual’s initial appointment, and has never beenshall not have been at any time during the preceding five years, and will shall not be at any time while serving as Special Member bea director of such SPE Component Entity, any of the following: either (vi) a membershareholder (or other equity owner) of, or an officer, director, partner, equityholder, manager, director, officer member or employee of the of, Borrower or any of its respective equityholders shareholders, partners, members, subsidiaries or Affiliates affiliates, (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (xii) a creditorcustomer of, or supplier or service provider (including provider of professional services) to the to, Borrower or any of its equityholders respective shareholders, partners, members, subsidiaries or Affiliates affiliates, (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (yiii) a Person who Controls or is under common Control with any such shareholder, officer, director, partner, member, employee supplier or customer, or (iv) a member of the immediate family member of any such membershareholder, officer, director, partner, equityholder, manager, director, officermember, employee, creditor, supplier or service provider; or customer.]
(zd) [Insert this section only if the Commitment requires an Independent Director (if the Borrower is a Person that controls (whether directlycorporation, indirectly or otherwise) any of (vchange the term SPE Component Entity in this section to “Borrower”), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement .] The organizational documents of the Special Member SPE Component Entity shall require provide that the board of directors of the SPE Component Entity shall not 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, requires an unanimous vote of the board of directors of the SPE Component Entity of Borrower unless at the time of such action there shall be at least one member of the board of directors who is an Independent Director. The SPE Component Entity will not without the unanimous written consent of its Board of Directors including the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason Independent Director, on behalf of being the Special Member of a “special purpose entity” affiliated with itself or the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute file or consent to the institution filing of bankruptcy any petition, either voluntary or insolvency proceedings against itinvoluntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (db) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian liquidator or any similar official for the Borrowerofficial, (ec) take any action that might cause such entity to become insolvent, or (d) make any an assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.. ]
Appears in 1 contract
Sources: Deed of Trust and Security Agreement
Special Purpose Entity. The Borrower has not (a) This Section 9 is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity.
(b) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, the Board, any Officer or any other Person, the Company shall not, without the prior unanimous written consent of the Member and the Board, including all Independent Managers, take any Material Action, and neither the Member nor the Board nor any Officer nor any other Person shall, be authorized or empowered, nor shall they permit the Company, without the prior unanimous written consent of the Member and the Board, including all of the Independent Managers, to take any Material Action; provided, however, that the Board may not vote on, or authorize the taking of, any Material Action unless there are at least two (2) Independent Managers.
(c) Notwithstanding anything to the contrary contained herein or any other document governing the formation, management or operation of the Company, in addition to any other restrictions provided in this Agreement, for so long as any obligation or liability of the Company remains outstanding under any Loan Document, the Company shall not do, and the Managers shall cause the Company not to do, any of the following things:
(iA) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretocontemplated by Section 6;
(iiB) acquire or own any assets other than (a) those related to its ownership interest in the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsProperty;
(iiiC) except as otherwise permitted under the Loan Documents and to the fullest extent permitted by applicable law, merge or consolidate itself into or consolidate with any Person Person, or dissolve, terminate or liquidate in whole or in partpart (to the fullest extent permitted by law), transfer or otherwise dispose of all or substantially all of its assets or convert to another type of legal entity (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationherein);
(ivD) fail to preserve its the existence of itself as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the its jurisdiction of its organization or formationorganization, or fail to observe all limited liability company formalities, or fail to maintain its books, records, resolutions and agreements as official entity records, except as permitted herein;
(E) own any subsidiary, or make any investment in, any person or entity without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalitiesLender;
(vF) form, acquire commingle its funds or own any Subsidiary, own any equity interest in assets with the funds or assets of any other entity, or make any Investment in any Person Person;
(other than Permitted InvestmentsG) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets Lender, incur or assume any debt on behalf of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessitself, secured or unsecured, direct or contingent (including guaranteeing any obligation), ) other than Indebtedness (i) as permitted under the Loan Documents, (ii) unsecured trade payables incurred in the ordinary course of business relating to the Secured Parties hereunder or ownership and operation of the Property with trade creditors (including, without limitation, financing leases and purchase money indebtedness incurred in conjunction the ordinary course of business relating to personal property on commercially reasonable terms and conditions, except as may be prohibited by the Loan Documents) not exceeding, together with any indebtedness of Northstar TRS, at any time, a repayment maximum amount of all Advances owed five percent (5%) of the Allocated Loan Amount (as defined in the Loan Documents) attributable to the Lenders Property and which are paid within sixty (60) days of incurrence, except as may be prohibited by the Loan Documents, and/or (iii) the performance of any monetary obligations of the Company, in its capacity as landlord, under that certain Lease Agreement, dated as of January 20, 2007, between the Company, as landlord, and Trimont Land Company, a termination of all corporation unaffiliated with the CommitmentsCompany, as tenant;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ixH) fail to maintain its the records, books of account and bank accounts and financial statements of itself separate and apart from those of any other Person, except that Company’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate; provided that the Company is properly reflected and treated as a separate legal entity in such consolidated financial statements, and that its assets are not available to satisfy claims of the consolidated entities;
(xI) other than the Loan Documents, enter into into, on behalf of itself, any contract or agreement with any Personof its members, principals, partners and Affiliates, or any member, principal, partner or Affiliate thereof, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are intrinsically fair, commercially reasonable and no less favorable to it than those that would be available on an armsarm’s-length basis with third parties other than such Personparties, except as contemplated by the Loan Documents or by the written consent of Lender;
(xiJ) seek maintain its dissolution assets in such a manner that it shall be costly or winding up in whole difficult to segregate, ascertain or in part;
(xii) fail to correct identify their respective individual assets from those of any known misunderstandings regarding the separate identity of the Borrower its members, shareholders, principals, partners and the Related Fund Affiliates, or any member, shareholder, principal, partner or Affiliate thereof or any other Person;
(xiiiK) except as provided in this Agreementassume, guarantee, guaranty or become obligated forfor the debts of any other Person, or hold itself out to be responsible for the debt debts of another any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
(xivL) except as otherwise permitted under the Loan Documents, make any loans, advances to any Person or hold evidence of indebtedness issued by any other Person or entity, without the prior written consent of Lender;
(M) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or Person (and not as a division or part of any other Person except as required by federal or state income tax reporting), fail to (and has not failed to) correct any known misunderstanding regarding its separate identity, or fail to conduct its business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it the Company is responsible for the debts of any third party (including any of its their respective partners, members, principals and Affiliates, or Affiliatesany general partner, managing member, shareholder, principal of Affiliate thereof), except as contemplated herein or by any applicable Loan Documents;
(xvN) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation foregoing shall be made on such consolidated financial statements not require the Member to indicate make any additional capital contributions to the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetCompany;
(xixO) fail to remain solvent or to pay its own liabilities and expenses only out of its own fundsfunds as the same shall become due, and will give prompt written notice to Lender of the insolvency or bankruptcy filing of the Company or Brighton TRS or any managing member or controlling shareholder of the Company or Brighton TRS;
(xxP) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, employees (if any) from its own funds and to maintain either a sufficient number of employees or independent contractors pursuant to arm’s length agreement(s) for necessary and appropriate business activities and administration in light of its contemplated business operations;
(xxiQ) to the extent the Company has or requires an office, fail to maintain such office through which its business shall be conducted separate and apart from that of any of its Affiliates, or fail to fairly and reasonably allocate shared expenses (including, without limitation, shared office space and services performed by an employee of an Affiliate) among the Persons sharing expenses;
(R) fail to conduct business in its own name;
(S) fail to maintain and use separate stationery, invoices and checks from those of any other Person;
(T) acquire the obligations or securities of its Affiliates Affiliates, or membershave its obligations guaranteed by any Affiliate, except as contemplated by the Loan Documents;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiiU) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to either file its own tax returns or, if applicable, a consolidated federal income tax return, as required by applicable legal requirements;
(V) violate or cause to be violated the assumptions made with respect to the Company and its members in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Loan;
(W) fail to hold its assets in its name;
(X) fail to (and has not failed to) maintain an arms-length relationship with its Affiliates; and
(Y) except with the prior unanimous written consent of the Lender, Member and Board, including all Independent Managers, take or consent to any action amending or modifying any provision of the Company’s organizational documents that alters Section 8(j) or that adversely affects any of the requirements for qualifying as a Special Purpose Entity, including any amendment or modification of this Section 9 or Section 6 hereof. Failure of the Company, or any Manager or Officer on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate from those legal entity or the limited liability of the Member.
(d) The Company shall not allow direct or indirect transfers of ownership interests in or control rights over the Company that would violate the provisions of any Loan Document.
(e) The Company’s obligation hereunder, if any, to indemnify its directors and officers, members, or managers, as applicable, is hereby fully subordinated to each of the Loan and the Loan Documents, and will not constitute a claim against it in the event that the cash flow in excess of the amount required to pay the amounts outstanding under the Loan Documents is insufficient to pay such obligation; and no indemnity payment from funds of the Company (as distinct from funds from other Personsources, except such as insurance) of any indemnity hereunder, if any, shall be payable from amounts allocable to any other person pursuant to the Loan Documents.
(f) To the fullest extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under permitted by applicable law, the Company shall not, without the prior written consent of Lender, issue, create, exchange, dilute or modify any additional limited liability company interests of the Company other than its initial issuance of limited liability company interests issued on or prior to the date hereof.
(g) This Section 9 may not be modified, altered, supplemented or amended unless the Rating Agency Condition is satisfied. As used herein, the term “Rating Agency Condition” shall mean (i) with respect to any action taken at any time before the Loan has been sold or assigned to a securitization trust, that Lender has consented in writing to such action, and pay (ii) with respect to any taxes required action taken at any time after the Loan has been sold or assigned to be paid under applicable lawa securitization trust, that (A) Lender has consented in writing to such action, and (B) each Rating Agency (defined below) rating securities backed by such Loan shall have been given ten (10) days prior notice thereof and that each of the Rating Agencies shall have notified Lender in writing that such action will not result in a downgrade, reduction or withdrawal of the then current rating by such Rating Agency of any of securities issued by such securitization trust backed by such Loan. As used herein, the term “Rating Agency” or “Rating Agencies” shall have the meanings ascribed to those terms in the Loan Documents.
Appears in 1 contract
Sources: Limited Liability Company Agreement (CNL Income Mesa Del Sol, LLC)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;; [Investcorp] Loan and Security Agreement
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length arms‑length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;; [Investcorp] Loan and Security Agreement
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;; [Investcorp] Loan and Security Agreement
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; oror [Investcorp] Loan and Security Agreement
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp US Private Credit BDC II)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents, (ii) with respect to any Revolving Loan or Delayed Draw Loan owned by the Secured Parties hereunder or Borrower, obligations to fund under the terms of the Underlying Instruments and (iii) Indebtedness in conjunction with a repayment of all Advances owed to the Lenders Obligations and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements on customary terms relating to the acquisition, origination and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s 's assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s 's own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “"Special Member”") which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent directora Special Member, independent manager or independent member with at least three years of employment experience and who is provided by Citadel SPV, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its their respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (vw) above by reason of being the Special Member of a “"special purpose entity” " affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, Borrower provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s 's annual income for that year; provided, further, that Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its reasonable discretion upon the death, resignation or incapacitation of the current Special Member;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s 's Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s 's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid by it under applicable law.
Appears in 1 contract
Sources: Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp)
Special Purpose Entity. The Borrower Equityholder has not and shall not:
(i) engage in any business or activity other than (x) the transactions contemplated by the Repo Transaction Documents (as defined in the Repo Termination Agreement), (y) the entry into the Repo Termination Agreement, and (z) the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the Equityholder and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any Subsidiary (other entity, than the Borrower) or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson (other than the Borrower);
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Repo Transaction Documents and (as defined in the Repo Termination Agreement), (b) the Repo Termination Agreement, (c) the Transaction Documents, (d) the documents specifically contemplated by the Equityholder LLC Agreement, (e) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such PersonPerson and (d) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower Equityholder and the Related Fund CIC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (other than the Borrower);
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person (other than for tax purpose) or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the BorrowerEquityholder’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) CIC so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower Equityholder from such Affiliate CIC and to indicate that the Borrowerunavailability of the Equityholder’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate CIC or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, Person (other than with respect to payment of the indebtedness to the Secured Parties hereunderBorrower);
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in Borrower, the ordinary course of its businessEquityholder, and which individual is duly appointed as or the Collateral Manager or any major creditor, or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates such Affiliate (other than as a Special Member an independent manager or similar position of the Borrower Borrower, the Equityholder, the Collateral Manager or an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Equityholder or any voting, investment or other ownership interests of any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier Equityholder or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies permitted pursuant to the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member Constitutive Documents of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearEquityholder;
(xxviixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower Equityholder to (a) institute proceedings to be adjudicated adjudicated, bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition or answer seeking or consent to reorganization reorganization, arrangement, composition, readjustment or similar relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerEquityholder, (e) make any assignment for the benefit of the BorrowerEquityholder’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, (g) file an answer or other pleading admitting or failing to contest the material litigation of a petition filed in any proceeding of this nature, or (gh) take any action in furtherance of any of the foregoing; orand
(xxviiixxvii) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of W▇▇▇▇ & Case LLP, except to dated as of the extent that date hereof upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;; [KFIT] Loan and Security Agreement
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementagreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and Borrower, the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);; [KFIT] Loan and Security Agreement
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) other than prior to the Effective Date. (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate any of the Borrower that is not in the direct chain of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; provided that the Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its sole discretion upon the death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (vw) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year;; [KFIT] Loan and Security Agreement
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;; [Investcorp] Loan and Security Agreement
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;; [Investcorp] Loan and Security Agreement
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;; [Investcorp] Loan and Security Agreement
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Investment Management Agreement (Investcorp Credit Management BDC, Inc.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its operating agreement, agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such PersonPerson and (c) as otherwise permitted under the Transaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund BDC or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the BDC so long as the separateness of the Borrower from such Affiliate the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the BDC are disclosed by the BDC within all public filings that contain such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxv) (A) fail at any time to have at least one (1) independent member manager or director (the “Special MemberIndependent Manager”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower, the BDC or an Affiliate), or (ii) the beneficial owner of any limited liability company interests of the Borrower or any voting, investment or other ownership interests of its respective equityholders or Affiliates (other than as a Special Member any Affiliate of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Manager are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Manager) except as otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with permitted pursuant to the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLLC Agreement;
(xxviixxvi) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. The Borrower Company has not and shall not:
not (ia) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Loan Documents, the entry into and the performance under the Transaction Loan Documents and such other activities as are incidental thereto;
, (iib) acquire or own any assets other than (ax) the Collateral or and (by) incidental property as may be necessary for the operation of the Borrower Company and the performance of its obligations under the Transaction Loan Documents;
, including, without limitation, capital contributions which it may receive from the Guarantor, (iiic) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(ivd) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, agreement or fail to observe limited liability company formalities;
, in each case, in a manner that would be material and adverse to the Lenders, (ve) form, acquire or own any Subsidiary, own any equity interest in any other entity, entity or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
Agent (viwhich consent shall not be unreasonably conditioned, withheld or delayed), (f) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
, (viig) incur any IndebtednessIndebtedness for borrowed money, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
, (viiih) fail to pay its debts and liabilities from its assets as the same shall become due;
, (ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Loan Documents, (xj) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Loan Documents, (b) the documents specifically contemplated by the limited liability company agreement of the Company, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such Person;
Person and (xid) as otherwise permitted under the Loan Documents, (k) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
, (xiil) fail to correct any known misunderstandings regarding the separate identity of the Borrower and Company, the Related Fund Guarantor or any other Person;
Person (xiiiother than for tax purposes), (m) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
, (xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
, (xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
operations (xvi) file or consent provided that in no event shall this clause require any equity holder to make additional capital contributions to the filing of any petitionCompany), either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviip) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
, (xviiiq) fail to maintain separate financial statements, showing its assets company records and liabilities books of account separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; providedprovided that, however, that the BorrowerCompany’s assets and liabilities may be included in a consolidated financial statement of its Affiliate provided that Affiliate, (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixr) fail to pay its own liabilities and expenses only out of its own funds;
, (xxs) fail to maintain a sufficient number of employeesemployees (which may be zero), if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
, (xxit) acquire the obligations of or securities of issued by its Affiliates or members;
, it being understood that this clause (xxiixxi) shall not prevent the Company from acquiring Collateral from the Guarantor, (u) guarantee any obligation of any person, including an Affiliate;
, (xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office maintained by an Affiliate (if any) space and services performed by any employee of an Affiliate;
, (xxivw) fail to use separate invoices and checks bearing its own name;
, (xxvx) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
, (xxviy) (A) fail at any time to have at least one (1) independent member director (the “Special MemberIndependent Director”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporationnot currently (a) a manager, Corporation Service Companyofficer, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an employee or Affiliate of the Borrower and that provides professional Special Members and other corporate services in Company or the ordinary course of its businessGuarantor or any major creditor, and which individual is duly appointed as or a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates such Affiliate (other than as a Special Member an independent manager or similar position of the Borrower Company, the Guarantor or an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Company or any voting, investment or other ownership interests of any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier Company or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; major creditor or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require Independent Director are duly authorized by the written consent unanimous vote of the Administrative Agent. A natural person who board of managers (including the Independent Director) except as otherwise satisfies permitted pursuant to the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member limited liability company agreement of the BorrowerGuarantor, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiz) fail to provide in its limited liability company agreement that the unanimous consent of all members (including and the consent of the Borrower’s Special Member) is Independent Director are required for the Borrower Company to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itthe Company, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, provisional liquidator assignee, trustee, sequestrator, custodian custodian, restructuring officer or any similar official for the BorrowerCompany, (e) make any assignment for the benefit of the BorrowerCompany’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
, or (xxviiiaa) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower Company is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawpurposes.
Appears in 1 contract
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;; [Investcorp] Loan and Security Agreement
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length arms‑length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;; [Investcorp] Loan and Security Agreement
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;; [Investcorp] Loan and Security Agreement
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; oror [Investcorp] Loan and Security Agreement
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp US Private Credit BDC II)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementpartnership agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;; [FS Investment] Loan and Security Agreement
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and Borrower, the Related Fund Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors[Reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;; [FS Investment] Loan and Security Agreement
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) other than prior to the Effective Date. (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate any of the Borrower that is not in the direct chain of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; provided that the Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its sole discretion upon the death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (vw) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year;; [FS Investment] Loan and Security Agreement
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.
Appears in 1 contract
Sources: Loan and Security Agreement (FS Investment Corp IV)
Special Purpose Entity. The Borrower shall not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Contracts and management of Collateralrelated assets from the Originator under the Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Contracts and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Contracts and related assets acquired from the Originator under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction DocumentsBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation’s consent;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe Delaware limited liability company formalitiesformalities that would have a Material Adverse Effect;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, subsidiary or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Transaction Document or in conjunction with a repayment of all Advances owed to Aggregate Unpaids or any Hedging Agreement except for trade payables in the Lenders ordinary course of its business, provided that such trade payables are not evidenced by a note and a termination of all the Commitmentsare paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Personits Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments (to the extent permitted hereunder) and Contracts);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate invoices and checks bearing its own name;
(xxvxxvi) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties Lender hereunder;
(xxvi) (Axxvii) fail at any time to have at least one two (12) independent member directors (the each, an “Special MemberIndependent Director”) on its board of directors (A) neither of which shall be a natural Person approved by the Administrative Agent in its sole discretionis, which member mustor has been, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with for at least three five (5) years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade creditor or shareholder (or spouse, supplier parent, sibling or service provider; child of the foregoing) of (x) the Servicer, (y) the Borrower, or (z) a Person that controls (whether directly, indirectly any Affiliate of the Servicer or otherwise) any of (v), (x) or (y) above; or Borrower and (B) fail each of which is acceptable to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason ; provided, however, such Independent Director may be an independent director or manager of being the Special Member of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearServicer;
(xxviixxviii) fail to provide that the unanimous consent of all members directors (including the consent of the Borrower’s Special MemberIndependent Directors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; orand
(xxviiixxix) fail to file its own tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., except to delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. The Borrower shall not (nor has not and shall not:
(i) the Borrower taken any such action in the past): • engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets from UACC under the Purchase Agreement, the transfer and pledge of Receivables and other Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) ; 155673.00101/154424345v.13 • acquire or own any material assets other than (aA) the Collateral or Receivables and related assets from UACC under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) Borrower; • merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) ’s consent; • fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreementFormation Documents or other governing documents, as applicable, or fail to observe limited liability company corporate formalities;
(v) form, acquire or ; • own any Subsidiary, own any equity interest in any other entity, Subsidiary or make any Investment investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) ; • commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) , except as contemplated hereunder or under the Intercreditor Agreement; • incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) paid when due; • become not Solvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) ; • fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) , except as contemplated hereunder or under the Intercreditor Agreement; • enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than such Person;
(xi) its Affiliates; • seek its dissolution or winding up in whole or in part;
(xii) ; • fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund or UACC, as applicable, or any principal or Affiliate thereof or any other Person;
(xiii) except as provided in this Agreement, ; • guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
, except as expressly provided in the Basic Documents; 155673.00101/154424345v.13 • make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (xiv) other than Permitted Investments); • fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) ; • fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) ; • file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xvii) except as may be required ; • share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
; • permit any transfer (xviiiwhether in any one or more transactions) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included a direct or indirect ownership interest in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and (other than in accordance with the Trust Agreement), unless the Borrower delivers to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) Administrative Agent an acceptable non-consolidation opinion; • fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) ; • acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) stockholders; • fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) ; • fail to use separate invoices and checks bearing its own name;
(xxv) ; • pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties Lenders hereunder;
(xxvi) (A) ; • fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services include provisions in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower Trust Agreement that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) Owner Trustee is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state State law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit 155673.00101/154424345v.13 in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or
(xxviii) • amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents; • not take or refrain from taking, as applicable, each of [***], dated the Closing Date; • elect or otherwise permit the Borrower to be treated as an entity taxable as a corporation for U.S. federal income tax purposes; and • fail to file maintain separate financial statements, showing its own tax returns assets and liabilities separate and apart from those of any other Person, except to or have its assets listed on the extent financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliates if (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower is treated as a “disregarded entity” for tax purposes from such Affiliates and is to indicate that the Borrower’s assets and credit are not required available to file tax returns under applicable law, satisfy the debts and pay obligations of such Affiliates or any taxes required to other Person and (b) such assets shall also be paid under applicable lawlisted on the Borrower’s own separate balance sheet.
Appears in 1 contract
Sources: Warehouse Agreement (Vroom, Inc.)
Special Purpose Entity. The (a) Except as specifically permitted in this Agreement and in connection with the Original Credit Facilities, the Borrower has not and shall not:
(i) engage entered into any transaction of acquisition (except as provided in the Lease/Purchase Documents), merger, consolidation or amalgamation, or taken any business action to liquidate, wind up or activity other than the purchasedissolve itself, receipt and management of Collateralnor has it suffered any liquidation or dissolution, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or (ii) created any Subsidiaries, or acquired by purchase or otherwise dispose of all or substantially all the business or assets (except as provided in the Lease/Purchase Documents) of, or stock or other evidences of beneficial ownership of, or made any investment in, any Person, or (iii) made any material change in its present method of conducting business or (iv) amended the terms of its organizational documents or taken any action that might cause it to become insolvent;
(b) the Borrower has not contemplated and is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws, or the liquidation of all or a major portion of its assets (other than in accordance with or property, and the provisions hereof), without in each case first obtaining Borrower has no knowledge of any Person contemplating the prior written consent filing of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationany such petition against it;
(ivc) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formationBorrower has not become obligated for, or without the prior written consent of the Administrative Agentotherwise held out its credit or assets as being available to satisfy obligations of, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viid) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), the Borrower was organized for the sole purpose of buying from and leasing back assets to the Company; other than Indebtedness in connection with the Original Credit Facilities, the Borrower has not during its existence, and will not, engage in any business unrelated to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders such activities and a termination of all the Commitmentswill conduct and operate its business as presently conducted and operated;
(viiie) fail to pay its debts the Borrower will maintain an arm’s length relationship with the sole shareholder or any Affiliate of the Borrower and liabilities from its assets as the same shall become due;
(ix) fail to maintain its recordsBorrower has not entered into, books of account and bank accounts separate and apart from those of any other Person;
(x) will not enter into into, any contract or agreement with such shareholder or any PersonAffiliate of the Borrower, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an arms-length basis with unrelated third parties other than such Personparties;
(xif) seek its dissolution the Borrower has not incurred, and will not incur, any Indebtedness or winding up material liabilities, secured or unsecured, direct or contingent (including any Guarantee Obligation), other than under the Original Credit Facilities (which, with respect to the Original Credit Facility described in whole clause (a) of the definition thereof, has been discharged prior to the date hereof, and with respect to the Original Credit Facility described in clause (b) of the definition thereof, will be discharged at the closing hereunder) and other than the Indebtedness permitted hereunder; the Borrower has not granted, and will not grant, any Lien except for Liens under the Original Credit Facilities (which, with respect to the Original Credit Facility described in clause (a) of the definition thereof, has been discharged prior to the date hereof, and with respect to the Original Credit Facility described in clause (b) of the definition thereof, will be discharged at or substantially contemporaneous with the closing hereunder) and except in partfavor of the Administrative Agent;
(xiig) fail except as specifically permitted in this Agreement or as provided in the Lease/Purchase Documents, and except for activities pursuant to correct any known misunderstandings regarding the separate identity of Original Credit Facilities, the Borrower has not made, nor will it make, any loans or advances to any other Person (including any Affiliate) or buy or hold evidence of any Indebtedness issued by any other Person (other than Investments permitted hereunder). Except as specifically permitted in this Agreement and except for activities pursuant to the Related Fund or Original Credit Facilities, the Borrower has not and will not pledge its assets for the benefit of any other Person;
(xiiih) except as provided in this Agreementthe Borrower has always been, guaranteeis, become obligated for, or hold itself out to and will be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate solvent and distinct will pay its debts and liabilities from any other Person or to conduct its business solely in its own name in order not (a) to mislead others assets as to the identity of same shall become due; the Person with which such other party is transacting businessBorrower has maintained, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintains and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvii) file or consent to the filing Borrower has maintained and will maintain its own separate books and records and bank accounts, which are and will be, in each case separate and apart from those of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiij) fail the Borrower has been, is and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate thereof), has maintained and utilized and shall maintain and utilize separate stationery, invoices and checks bearing its own name, has otherwise conducted and shall otherwise conduct its business and own its assets in its own name, and has and shall correct any known misunderstanding regarding its separate identity;
(k) subject to the requirements of the Tax Matters Agreement (and, in respect of matters prior to the closing hereunder, the respective tax matters agreements entered into in connection with the Original Credit Facilities), the Borrower has and will maintain separate financial statements, statements showing its assets and liabilities separate and apart from those of any other Person and Person, not have its assets listed on any the financial statement statements of another, and will file its own tax returns;
(l) the Borrower has not sought nor will it seek the dissolution or winding up, in whole or in part, of the Borrower;
(m) the Borrower has not commingled, and will not commingle, its funds or other assets with those of any Affiliate or other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that ;
(an) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower has not maintained, and will not maintain, its assets in such a manner making it costly or difficult to segregate, ascertain or identify its individual assets from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations those of such any Affiliate or any other Person and (b) such and, if requested by the Administrative Agent to do so after an Event of Default, will cause its assets shall also leased to any other Person to be listed on identified clearly thereon as owned by the Borrower’s own separate balance sheet;
(xixo) fail the Borrower will not do any act which would make it impossible to pay its own liabilities and expenses only out carry on the ordinary business of its own fundsthe Borrower;
(xxp) fail the Borrower has not, and will not, file or consent to maintain the filing of a sufficient number of employeespetition for bankruptcy, if anyreorganization, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations or securities of its Affiliates or members;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets assignment for the benefit of creditors or similar proceeding under any federal or state bankruptcy, insolvency, reorganization or other Person, other than similar law with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, conservator, assignee, trustee, sequestrator, custodian or any other similar official for of Borrower or a substantial part of the property of the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) or admit in writing its the inability of Borrower to pay its debts generally as they become due, or, except as expressly permitted under this Agreement, engage in transactions with Affiliates, or (g) take or induce any other entity to take any action in furtherance of any of the foregoing; orforegoing actions, without the unanimous consent of its board of directors;
(xxviiiq) fail to file the Borrower has observed and will observe all corporate formalities;
(r) the Borrower has not acquired, and will not acquire, the obligations or securities of any of its own tax returns separate from those partners, Affiliates, members or shareholders, as applicable;
(s) the Borrower has not paid, and shall not pay, for any overhead or other expenses of any other Person;
(t) the Borrower has complied at all times with each of the representations and warranties contained in this Section;
(u) the Borrower shall at all times have only Independent Directors, except whose vote shall be required in connection with all Major Decisions of the Borrower; and
(v) the Borrower’s Certificate of Incorporation conforms in all material respects to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawprovisions of this Section 4.27.
Appears in 1 contract
Special Purpose Entity. The Borrower will not (nor has not and shall not:it taken any such action in the past):
(i) engage in any business or activity other than the purchase, purchase and receipt of Receivables and management of Collateralrelated assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and (C) cash generated from the performance of its obligations under the Transaction Documentsforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formationRequired Lenders);
(iv) elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as a corporation for U.S. federal income tax purposes;
(v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its operating agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any SubsidiarySubsidiary or make any Investment in any Person, or own any equity interest in any other entity, or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person; provided, except (a) however, that the Transaction Documents Borrower may be included in Regional Management’s consolidated financial statements for Tax and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Personreporting purposes;
(xi) seek its dissolution or winding up up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than its Affiliates;
(xiii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Related Fund from any principal or Affiliate thereof or from any other Person;
(xiiixiv) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of its Affiliate provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Affiliate for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations pay or cause to pay be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) acquire the obligations or securities of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness Indebtedness to the Secured Parties hereunder;
(xxvi) (Axxviii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall Independent Manager on its board of managers; provided, however, such Independent Manager may be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent director or manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lenders, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (v) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (v), (x) or (y) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” entity affiliated with the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxviixxix) fail to provide that the unanimous consent of all members managers of the Borrower (including the consent of the Borrower’s Special MemberIndependent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxviiixxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable lawapplicable, and pay any taxes required to be paid under applicable laweach of the activities specified in the non-consolidation opinion of A▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Sources: Credit Agreement and Account Control Agreement (Regional Management Corp.)
Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt and management of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreementagreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities, or divide or permit any division of the Borrower;
(v) form, acquire or own any Subsidiary, own any equity interest in any other entityentity (other than any Equity Security received in exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof), or make any Investment in any Person (other than Permitted Investments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements relating to the acquisition and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and that would be available on an arms-length basis with third parties other than such Person;
(xi) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of the Borrower and Borrower, the Related Fund Transferor or any other Person;
(xiii) except as provided for in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not not
(a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equityholder of the Borrower to make any additional capital contributions;
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate Affiliate; provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetsheet (if any);
(xix) fail to pay its own liabilities and expenses only out of its own funds[reserved];
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) acquire the obligations of or securities of issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor or as otherwise permitted hereunder;
(xxii) guarantee any obligation of any person, including an Affiliate[reserved];
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Global Securitization Services, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional Special Members, another nationally recognized company reasonably approved by the Lendersthat routinely provides professional Special Members, in each case that is not an Affiliate of the Borrower and that provides professional Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member and is not, and has never been, and will not while serving as Special Member be, any of the following: (vw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its respective equityholders or Affiliates (other than as a Special Member of the Borrower or an Affiliate any of the Borrower that is not in the direct chain of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy remote entity); (x) a creditor, supplier or service provider (including provider of professional services) to the Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members and other corporate services to the Borrower or any of its equityholders or Affiliates in the ordinary course of business); (y) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (z) a Person that controls (whether directly, indirectly or otherwise) any of (vw), (x) or (y) above; or (B) fail to ensure provided that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent may serve in similar capacities for other special purpose entities established from time to time by Affiliates of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (v) by reason of being the Special Member of a “special purpose entity” affiliated with Borrower; provided, further, that the Borrower shall be qualified to serve as a Special Member of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to provide that the unanimous consent of all members (including the consent of the Borrower’s Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviii) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law.have
Appears in 1 contract
Sources: Loan and Security Agreement (Cim Real Estate Finance Trust, Inc.)
Special Purpose Entity. The Borrower At all times prior to the Collection Date, SPV-S has not and shall not:
(i) engage do anything that would result in any business or activity other than the purchase, receipt and management a breach of Collateral, the transfer and pledge Section 5.7(e) of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretothis Agreement;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as otherwise permitted by under this AgreementAgreement or any other Transaction Document, change its legal structure, or jurisdiction of formation;
(iv) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its operating agreement, limited liability company agreement or fail to observe observe, in all material respects, limited liability company formalities;
(viii) form, acquire or own any Subsidiary, own any equity interest Capital Stock in any other entityentity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted InvestmentsInvestments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(viiv) commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson (except for the Borrower);
(viiv) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments, (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.) and (3) Indebtedness pursuant to the Transaction Documents or any agreement for the sale or disposition of Loans;
(viiivi) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixvii) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xviii) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of SPV-S Collateral from an Affiliate Transferor, sales of SPV-S Collateral to an Affiliate Transferor, and distributions (including Permitted RIC Distributions) to its member in accordance with the terms hereof shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to SPV-S;
(xiix) seek its dissolution or winding up in whole or in partpart or divide or permit any division of SPV-S;
(xiix) fail to correct any known misunderstandings regarding the separate identity identities of SPV-S, on the Borrower one hand, and the Related Fund any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiixi) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (except for the Borrower);
(xivxii) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business business, solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates) (except for the Borrower);
(xvxiii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations (to the extent there exists sufficient cash flow from the SPV-S Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to SPV-S in order to comply with this provision);
(xvi) 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, or make an assignment for the benefit of creditors;
(xviixiv) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixv) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the BorrowerSPV-S’s assets may be included in a consolidated financial statement of its Affiliate provided that Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate Person and to indicate that the BorrowerSPV-S’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate Person or any other Person and (b) such assets shall also be listed on the BorrowerSPV-S’s own separate balance sheet;
(xixxvi) fail to pay its own liabilities and expenses only out of its own fundsfunds or the funds of the Borrower (including funds contributed to its capital by the Equityholder) (to the extent there exists sufficient cash flow from the SPV-S Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xxxvii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyany (for the avoidance of doubt, such number may be zero);
(xxixviii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities of issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any person, including an Affiliate;
(xxiiixix) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxx) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxi) except for any Permitted Lien, pledge its assets for to secure the benefit obligations of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (Axxii) fail at any time to have at least one (1) independent member (the “Special Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person Independent Manager who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization ▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ & Associates, National Registered Agents, Inc., Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation Corporation, Citadel SPV or, if none of those companies is then providing professional Special MembersIndependent Managers, another nationally recognized company reasonably approved by the LendersAdministrative Agent, in each case that is not an Affiliate of SPV-S, the Borrower Collateral Manager or any Affiliate Transferor and that provides professional Special Members Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as a Special Member an Independent Manager and is not, and has never been, and will not while serving as Special Member Independent Manager be, any of the following: (va) a member, partner, equityholder, manager, director, officer or employee of the Borrower SPV-S, or any of its respective equityholders equityholders, the Collateral Manager or Affiliates (other than as a Special Member an Independent Manager of the Borrower or an Affiliate of the Borrower SPV-S, that is not in the direct chain of ownership of the Borrower SPV-S and that is required by a creditor to be a single purpose bankruptcy bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional independent managers or directors); (xb) a creditor, supplier or service provider (including provider of professional services) to SPV-S, the Borrower Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Special Members independent managers and other corporate services to SPV-S, the Borrower Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (yc) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier a person described in (a) or service provider(b) above; or (zd) a Person that controls (whether directly, indirectly or otherwise) any of (va), (xb) or (yc) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (va) by reason of being the Special Member Independent Manager of a “special purpose entity” affiliated with the Borrower SPV-S shall be qualified to serve as a Special Member an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Special Member of affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearSPV-S;
(xxviixxiii) fail to ensure that all limited liability company actions relating to the appointment, maintenance or replacement of the Independent Manager are complied with;
(xxiv) fail to provide that the unanimous consent of all members managers (including the consent of the BorrowerSPV-S’s Special MemberIndependent Manager) is required for the Borrower SPV-S to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the BorrowerSPV-S, (e) make any assignment for the benefit of the BorrowerSPV-S’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxviiixxv) fail to file its own tax returns separate from those of any other Person, except to the extent that the Borrower SPV-S is treated as a “disregarded entity” entity for U.S. federal income tax purposes and is or to the extent that such failure does not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable lawconstitute a breach of Section 5.7(f)(vii).
Appears in 1 contract
Sources: Loan and Security Agreement (Stepstone Private Credit Fund LLC)