Common use of Special Purpose Subsidiary Clause in Contracts

Special Purpose Subsidiary. The Borrower agrees with the Agents, the Collateral Agent and each Lender that, until all Obligations have been paid and performed in full, the Commitments have terminated and the Revolving Credit Letters of Credit have (x) expired or been returned to the Issuer or (y) been cash collateralized to the reasonable satisfaction of the Collateral Agent and the Issuer, the Borrower will, and will cause the Special Purpose Subsidiary to, perform the obligations set forth in this Section 7.1. (a) The Special Purpose Subsidiary shall conduct its business solely in its own name through its duly Authorized Officers or agents so as not to mislead others as to the identity of the entity with which those Authorized Officers or agents are connected, and particularly will avoid the appearance of conducting business on behalf of the Parent, the Borrower or any Affiliate thereof or that the assets of the Special Purpose Subsidiary, other than funds on deposit in the Asset Sale Proceeds Account, are available to pay the creditors of the Parent, the Borrower or any Affiliate thereof. Without limiting the generality of the foregoing, all oral and written communications, including, without limitation, letters, invoices, purchase orders, contracts, statements and loan applications, will be made solely in the name of the Special Purpose Subsidiary. (b) The Special Purpose Subsidiary shall maintain corporate records and books of account separate from those of the Parent, the Borrower and the Affiliates thereof at the address designated herein for receipt of notices, unless the Special Purpose Subsidiary shall otherwise advise the parties hereto in writing. (c) The Special Purpose Subsidiary shall obtain proper authorization from its board of directors of all corporate actions requiring such authorization. Meetings of the board of directors will be held at least three times per annum and copies of the minutes of each such board meeting shall be delivered to the Agents within two weeks of such meeting. (d) The Special Purpose Subsidiary shall obtain proper authorization from its shareholders of all corporate action requiring shareholder approval. Meetings of the shareholders of the Special Purpose Subsidiary shall be held not less frequently than one time per annum and copies of each such authorization and the minutes of each such shareholder meeting shall be delivered to Agents within two weeks of such authorization or meeting, as the case may be. (e) Although the organizational expenses of the Special Purpose Subsidiary have been paid by SFC, operating expenses and liabilities of the Special Purpose Subsidiary shall be paid from its own funds. (f) The annual financial statements of the Special Purpose Subsidiary shall be prepared separately from those of the Parent, the Borrower and any Affiliate thereof and shall disclose the effects of the Special Purpose Subsidiary's transactions in accordance with GAAP and that the assets of the Special Purpose Subsidiary are available first and foremost for the benefit of the Agents and the Lenders and will not be available to pay creditors of the Parent, the Borrower or any Affiliate thereof. (g) The resolutions, agreements and other instruments of the Special Purpose Subsidiary underlying the transactions described in the Loan Documents shall be continuously maintained by the Special Purpose Subsidiary as official records of the Special Purpose Subsidiary separately identified and held apart from the records of the Parent, the Borrower and each Affiliate thereof. (h) The Special Purpose Subsidiary shall maintain an arm?s-length relationship with the Parent, the Borrower and the Affiliates thereof and will not hold itself out as being liable for the debts of the Parent, the Borrower or any Affiliate thereof. (i) The Special Purpose Subsidiary shall keep its assets and its liabilities wholly separate from those of all other entities, including, but not limited to the Parent, the Borrower and the Affiliates thereof, except as contemplated by the Asset Sale Proceeds Account Agreement or as permitted under the Loan Documents.

Special Purpose Subsidiary. The Borrower Company hereby agrees with the Agents, the Collateral Agent and each Lender that, until all Obligations have been paid without the Investor's prior written consent, which may be withheld in its sole discretion, from the date hereof and performed in full, so long as the Commitments have terminated Promissory Note remains out standing and unpaid or the Revolving Credit Letters of Credit have (x) expired or been returned to the Issuer or (y) been cash collateralized to the reasonable satisfaction of the Collateral Agent and the Issuer, the Borrower will, and will cause the Special Purpose Subsidiary to, perform the obligations set forth in this Section 7.1.Investor holds any Series A Preferred Stock: (a) The Special Purpose Subsidiary shall conduct its business solely in its own name through its duly Authorized Officers or agents so as not to mislead others as proceeds from the issuance and sale of the Promissory Note, the Preferred Shares and the Warrants to the identity Investor hereunder and, except as otherwise provided below, all funds generated thereby or assets acquired therewith, shall be held from and after the Closing Date (or, if earlier, the Funding Date) by a newly formed special purpose Delaware corporation which shall be a direct wholly owned subsidiary of the entity with Company ("SP SUBSIDIARY") which those Authorized Officers shall not have conducted any other activities or agents are connected, and particularly will avoid the appearance of conducting business on behalf of the Parent, the Borrower have any other as sets or any Affiliate thereof or that the assets of the Special Purpose Subsidiary, other than funds on deposit in the Asset Sale Proceeds Account, are available to pay the creditors of the Parent, the Borrower or any Affiliate thereof. Without limiting the generality of the foregoing, all oral and written communications, including, without limitation, letters, invoices, purchase orders, contracts, statements and loan applications, will be made solely in the name of the Special Purpose Subsidiaryliabilities. (b) The Special Purpose Except as otherwise provided below, all funds received by the Company from the Investor (including pursuant to Section 6.12) and all direct and indirect proceeds thereof shall also be contributed to and, subject to use as contemplated by Section 6.14(c), at all times held by SP Subsidiary shall maintain corporate records and books or a wholly owned Subsidiary of account separate from those SP Subsidiary or, with the prior written consent of the ParentInvestor, a joint venture in which SP Subsidiary (or a wholly owned Subsidiary thereof) is a joint venturer or partner, so long as, except for the Borrower and Company's ownership of all of SP Subsidiary's outstanding capital stock, neither the Affiliates Company nor any other Subsidiary thereof at the address designated herein for receipt of notices, unless the Special Purpose Subsidiary shall otherwise advise the parties hereto in writinghas an interest therein. (c) The Special Purpose only business transactions in which SP Subsidiary shall obtain proper authorization from its board engage are the development and sale of directors of all corporate actions requiring such authorization. Meetings of the board of directors will be held at least three times per annum Board- approved real estate development projects, including financing and copies of the minutes of each such board meeting shall be delivered to the Agents within two weeks of such meetingother activities incidental thereto. (d) The Special Purpose Until the fourth anniversary of the Closing Date, SP Subsidiary shall obtain proper authorization from its shareholders not declare or pay any dividend on, or make any payment on account of, the purchase, redemption, defeasance or retirement of all corporate action requiring shareholder approval. Meetings any capital stock of SP Subsidiary, or make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities or assets of, or make any other investment in, or engage in any other transactions with, the Company or any entity in which the Company has an interest, except that (i) the foregoing restrictions shall not apply to transactions with or investments in a wholly owned Subsidiary of SP Subsidiary; (ii) at any time after the Closing Date, SP Subsidiary can transfer funds to the Company, whether in the form of a dividend or otherwise, solely for the purpose of, or otherwise directly pay on the Company's behalf, any dividend or other cash payment on or in respect of Preferred Shares, (iii) upon the third anniversary of the shareholders Closing Date or, if earlier, any Repurchase Date (as defined in the Series A Preferred Stock Certificate of Designations), SP Subsidiary can transfer funds to the Company, whether in the form of a dividend or otherwise, solely for the purpose of, or otherwise directly pay on the Company's behalf in respect of, the purchase or redemption of Preferred Shares and (iv) to the extent the Company provides administrative and other services to SP Subsidiary, an appropriate portion of the Special Purpose Subsidiary general and administrative expenses of the Company (which shall be held not less frequently than one time per annum and copies of each such authorization reasonably agreed by the Company and the minutes of Investor and, to the extent possible, set forth in the pro forma financial statements for each such shareholder meeting shall Board-approved real estate development project) may be delivered allocated to Agents within two weeks of such authorization or meeting, as the case may beand reimbursed by SP Subsidiary. (e) Although At any time after the organizational expenses fourth anniversary of the Special Purpose Closing Date, SP Subsidiary have been paid by SFCmay declare and pay dividends in respect of its capital stock in an amount not to exceed, operating expenses and liabilities of the Special Purpose Subsidiary shall be paid from its own funds. (f) The annual financial statements of the Special Purpose Subsidiary shall be prepared separately from those of the Parentduring any fiscal year, the Borrower and any Affiliate thereof and shall disclose the effects lesser of the Special Purpose 5% of SP Subsidiary's transactions in accordance with GAAP and Excess Value (as defined below) or 10% of SP Subsidiary's cash-on-hand, provided that the assets no Event of the Special Purpose Subsidiary are available first and foremost for the benefit of the Agents and the Lenders and will not be available to pay creditors of the Parent, the Borrower or any Affiliate thereof. Default (g) The resolutions, agreements and other instruments of the Special Purpose Subsidiary underlying the transactions described as defined in the Loan Documents shall be continuously maintained by the Special Purpose Subsidiary as official records Series A Preferred Stock Certificate of the Special Purpose Subsidiary separately identified and held apart from the records of the Parent, the Borrower and each Affiliate thereof. (hDesignations) The Special Purpose Subsidiary shall maintain an arm?s-length relationship exists with the Parent, the Borrower and the Affiliates thereof and will not hold itself out as being liable for the debts of the Parent, the Borrower or any Affiliate thereof. (i) The Special Purpose Subsidiary shall keep its assets and its liabilities wholly separate from those of all other entities, including, but not limited respect to the ParentPreferred Shares. "EXCESS VALUE" shall mean SP Subsidiary's net worth, the Borrower after taking into account all of its liabilities, on a GAAP basis, and the Affiliates thereof, except as contemplated by the Asset Sale Proceeds Account Agreement or as permitted under the Loan Documentsall amounts necessary to redeem all outstanding Preferred Shares in full.