Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not: (i) engage in any business or activity other than the ownership of Transferred Loans and other Collateral and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental thereto; (ii) acquire or own any material assets other than (A) Transferred Loans, the other Collateral and related assets from the BDC or (B) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan Documents; (iii) merge into or consolidate with any Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change its legal structure, without in each case first obtaining the consent of the Administrative Agent; (iv) fail to preserve its existence as a limited liability company, validly existing and in good standing under the laws of the State of Delaware, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply in any material respect with the provisions of its limited liability company agreement or fail to observe in any material respect limited liability company formalities; (v) own any Subsidiary or make any investment in any Person, other than the Transferred Loans and Permitted Investments, without the consent of the Administrative Agent; (vi) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation) except (A) obligations incurred under this Agreement, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to the maintenance of its existence in good standing; (vii) in the Borrower’s reasonable determination, 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, or become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower; (viii) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; (ix) fail to correct any known misunderstandings regarding the separate identity of Borrower and the BDC or any principal or Affiliate thereof or any other Person; (x) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person; (xi) 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 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); (xii) acquire the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property; (xiii) pledge its assets to secure the Indebtedness, or for the benefit, of any other Person; (xiv) fail at any time to have at least one independent manager (an “Independent Manager”) who: (1) is an employee of, or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an independent trustee or independent manager), officer, employee, partner, attorney or consultant of (a) the Servicer, (b) the BDC, (c) any principal of the Servicer or the BDC, (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereof; provided, however, such Independent Manager may be an independent director, independent trustee or independent manager of another special purpose entity affiliated with the BDC or the Servicer; (xv) 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 members and managers (including, without limitation, the Independent Manager); (xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents; (xvii) fail to provide that the consent of the Independent 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 the Borrower, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrower, (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 the Borrower’s inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing; (xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person; (xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower; (xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons; (xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent; (xxii) 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; (xxiii) 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; (xxiv) fail to pay its own liabilities and expenses only out of its own funds; (xxv) 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; and (xxvi) fail to file its own income 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: Credit Agreement (Trinity Capital Inc.), Credit Agreement (Trinity Capital Inc.), Credit Agreement (Trinity Capital Inc.)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement, (Bb) any Third Party Acquired Loans and (c) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative AgentAgent and each Lender;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative AgentAgent and each Lender, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement operating agreement, or fail failed to observe in any material respect limited liability company formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Agent;
(vi) incur except as permitted by this Agreement, the Concentration Account Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided that such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or, except as otherwise contemplated by the Transaction Documents, held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to any other Person to the extent that such Person would, as a result of such transfer, have the ability to control the Borrower, unless the Borrower shall have delivered to the Agent an Opinion of Counsel as to matters relating to non-consolidation, in form and substance acceptable to the Agent, and the Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person; provided that the inclusion of such financial information in the consolidated financial statements of Kohlberg Capital shall not be deemed a breach of this clause (xx);
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one independent manager (each, an “Independent Manager”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate ofnot and, and is operated byfor the immediately preceding two year period, employees of Citadel SPV LLC, or otherwise has was not (xa) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an Independent Manager), officer of employee of the Borrower; (b) a director, officer or employee of Kohlberg Capital Corporation (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Borrower, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Borrower, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set forth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any this Section 4.1(t)(xxvii); provided that such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereof; provided, however, such Independent Manager independent directors may be an independent director, independent trustee director or independent manager director of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) fail failed to ensure provide in its operating agreement that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote consent of the members and managers all directors (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that including the consent of the Independent Manager Managers) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvixxix) fail to file its own income tax returns separate taken or refrained from those taking, as applicable, each of any other Personthe activities specified in the non–consolidation opinion of Ropes & ▇▇▇▇ 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 2 contracts
Sources: Loan Funding and Servicing Agreement (Kohlberg Capital CORP), Loan Funding and Servicing Agreement (Kohlberg Capital CORP)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer Originator and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer Originator (other than for tax purposes) and from each such other Affiliate of the BDC and the ServicerOriginator. The Borrower has not and shall not:
(i) engage in any business or activity other than the ownership of Transferred Loans and other Collateral and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (A) Transferred Loans, the other Collateral and related assets from the BDC Originator or (B) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan Documents;
(iii) merge into or consolidate with any Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail to preserve its existence as a limited liability company, validly existing and in good standing under the laws of the State of Delaware, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply in any material respect with the provisions of its limited liability company agreement or fail to observe in any material respect limited liability company formalities;
(v) own any Subsidiary or make any investment in any Person, other than the Transferred Loans and Permitted Investments, without the consent of the Administrative Agent;
(vi) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation) except (A) obligations incurred under this Agreement, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, Master Transfer Agreement or incident to it being a lender under the Loans and (B) liabilities incident to the maintenance of its existence in good standing;
(vii) in the Borrower’s reasonable determination, 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, or become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viii) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ix) fail to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(x) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person (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 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);
(xii) acquire the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiii) pledge its assets to secure the Indebtedness, or for the benefit, of any other Person;
(xiv) fail at any time to have at least one independent director or manager (an “Independent ManagerDirector”) who: (1) is an employee of, or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLCThe Corporation Trust Company, Intertrust, or another recognized securitization company providing directors for such purpose or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an independent trustee director or independent manager), officer, employee, partner, attorney or consultant of (a) the Servicer, (b) the BDCOriginator, (c) any principal of the Servicer Originator or the BDCServicer, (d) any Affiliate of the Servicer Originator or the BDCServicer, or (e) any Affiliate of any principal of the Servicer Originator or the BDCServicer, in each case, other than in the capacity of an independent manager or director, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer Originator or any Affiliate thereofAffiliate; provided, however, such Independent Manager Director may be an independent director, independent trustee or independent manager of another special purpose entity affiliated with the BDC Brightwood Capital or the Servicer;
(xv) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager Director are duly authorized by the unanimous vote of the members and managers (including, without limitation, the Independent ManagerDirector);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for the Borrower will provide not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager director that is to serve as an Independent Manager Director for purposes of this Agreement and the and, as a condition precedent to giving effect to such replacement or appointment that appointment, the Borrower shall certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent ManagerDirector”, nor and (3) the Borrower will not fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that the consent of the Independent Manager Director 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 the Borrower, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrower, (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 the Borrower’s inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person director as the Independent Manager Director without first confirming such proposed new Independent Manager Director satisfies the definition of “Independent ManagerDirector” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager Director to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds, provided that the Servicer or BCA may pay such expense so long as it is reimbursed by the Borrower therefor in accordance with Section 2.8;
(xxv) 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; and
(xxvi) fail to file its own income 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
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Deal Agent and each Lender Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Deal Agent or each Lender Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement trust agreement, or fail failed to observe in any material respect limited liability company statutory trust formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Deal Agent and each Lender Agent;
(vi) incur except as permitted by this Agreement, the Lock–Box Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances and Swingline Advances owed to any of the Lenders, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Deal Agent and each Lender Agent an acceptable non–consolidation opinion and the Deal Agent and each Lender Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two independent manager trustees (each, an “Independent ManagerTrustee”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager trustee (other than an Independent Trustee), officer of employee of the Trust; (b) a director, officer or employee of American Capital Strategies, Ltd. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Trust, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Trust, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxviii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxviii); provided, however, that such Independent Manager independent trustees may be an independent director, independent director or trustee or independent manager of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail failed to provide that the unanimous consent of all trustees (including the consent of the Independent Manager Trustees) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;; or
(xviiixxix) except taken or refrained from taking, as contemplated by this Agreement or the other Transaction Documentsapplicable, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder each of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth activities specified in the Borrower’s limited liability company agreement and providing prior written notice non–consolidation opinion of Winston & S▇▇▇▇▇ LLP, dated as of the appointment of such new Independent Manager to Closing Date, upon which the Administrative Agent;
(xxii) enter into any contract or agreement with any Person, except (A) the Transaction Documents and (B) other contracts or agreements that conclusions expressed therein 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvi) fail to file its own income 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 lawbased.
Appears in 1 contract
Sources: Loan Funding and Servicing Agreement (American Capital Strategies LTD)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Deal Agent and each Lender Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Deal Agent or each Lender Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement trust agreement, or fail failed to observe in any material respect limited liability company statutory trust formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Deal Agent and each Lender Agent;
(vi) incur except as permitted by this Agreement, the Lock-Box Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances, under Swingline Advances and Alternative Currency Swingline Advances owed to any Hedging Agreement required by Section 5.2(a) or of the Sale and Contribution AgreementLenders, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or held evidence of indebtedness issued by any other Person (other than Permitted Investments and the Loans);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Deal Agent and each Lender Agent an acceptable non–consolidation opinion and the Deal Agent and each Lender Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person; provided, however, the Borrower’s assets and liabilities maybe included in the consolidated financial statements of American Capital for reporting purposes so long as such consolidated financial statements provide in a footnote that the Borrower is a single purpose entity and the Borrower owns its own assets, which are not available to satisfy the liabilities of any affiliated party, and is liable only for its own liabilities and not for those of any other affiliated party;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, stockholders (except for the Transferred Loans and interests in Related PropertyACAS Business Loan Trust Securities);
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one independent manager trustee (an “Independent ManagerTrustee”) who: (1) is an employee of), or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager trustee (other than an Independent Trustee), officer of employee of the Trust; (b) a director, officer or employee of American Capital Strategies, Ltd. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Trust, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Trust, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent trustee may be an independent director, independent manager or trustee or independent manager of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail failed to provide that the unanimous consent of all trustees (including the consent of the Independent Manager Trustee) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;; or
(xviiixxix) except taken or refrained from taking, as contemplated by this Agreement or the other Transaction Documentsapplicable, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder each of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth activities specified in the Borrower’s limited liability company agreement and providing prior written notice non–consolidation opinion of Winston & ▇▇▇▇▇▇ LLP, dated as of the appointment of such new Independent Manager to Closing Date, upon which the Administrative Agent;
(xxii) enter into any contract or agreement with any Person, except (A) the Transaction Documents and (B) other contracts or agreements that conclusions expressed therein 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvi) fail to file its own income 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 lawbased.
Appears in 1 contract
Sources: Loan Funding and Servicing Agreement (American Capital Strategies LTD)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement operating agreement, or fail failed to observe in any material respect limited liability company formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Agent;
(vi) incur except as permitted by this Agreement, the Concentration Account Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Conduit Lender, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or, except as otherwise contemplated by the Transaction Documents, held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Agent an acceptable non–consolidation opinion and the Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two independent manager directors (each, an “Independent ManagerDirector”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager director (other than an Independent Director), officer of employee of the Borrower; (b) a director, officer or employee of Patriot Capital Funding, Inc. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Borrower, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Borrower, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent directors may be an independent director, independent trustee director or independent manager director of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) fail failed to ensure provide in its operating agreement that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote consent of the members and managers all directors (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that including the consent of the Independent Manager 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvixxix) fail to file its own income tax returns separate taken or refrained from those taking, as applicable, each of any other Personthe activities specified in the non–consolidation opinion of ▇▇▇▇▇▇ & Bird 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
Sources: Loan Funding and Servicing Agreement (Patriot Capital Funding, Inc.)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement operating agreement, or fail failed to observe in any material respect limited liability company formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Agent;
(vi) incur except as permitted by this Agreement, the Concentration Account Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Conduit Lender, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or, except as otherwise contemplated by the Transaction Documents, held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Agent an acceptable non–consolidation opinion and the Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two independent manager directors (each, an “Independent ManagerDirector”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager director (other than an Independent Director), officer of employee of the Borrower; (b) a director, officer or employee of Patriot Capital Funding, Inc. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Borrower, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Borrower, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent directors may be an independent director, independent trustee director or independent manager director of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) fail failed to ensure provide in its operating agreement that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote consent of the members and managers all directors (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that including the consent of the Independent Manager 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvixxix) fail to file its own income tax returns separate taken or refrained from those taking, as applicable, each of any other Personthe activities specified in the non–consolidation opinion of A▇▇▇▇▇ & Bird 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
Sources: Loan Funding and Servicing Agreement (Patriot Capital Funding, Inc.)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDCGrantor shall not hold or acquire, the Servicer and directly or indirectly, any Affiliates thereof ownership interest (legal or equitable) in any real or personal property other than the Borrower)Property, and the Borrower hereby 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 or become a separate legal entity from the BDC, the Servicer and from each such other Affiliate shareholder of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage or a member or partner in any business or activity entity which acquires any property other than the ownership Property, until such time as the Indebtedness has been fully repaid. The operating agreement of Transferred Loans Grantor shall limit its purpose to the acquisition, operation, management and other Collateral and related assets, entering into this Agreement and disposition of the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction DocumentsProperty, and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (A) Transferred Loans, the other Collateral and related assets from the BDC or (B) incidental property as may purposes shall not be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan Documents;
(iii) merge into or consolidate with any Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail to preserve its existence as a limited liability company, validly existing and in good standing under the laws of the State of Delaware, or amended without the prior written consent of Grantee. Except as may be otherwise provided in the Administrative AgentLoan Agreement, amendGrantor covenants:
(a) To maintain its assets, modifyaccounts, terminate or fail to comply in books, records, financial statements, stationery, invoices, and checks separate from and not commingled with any material respect with the provisions of its limited liability company agreement or fail to observe in those of any material respect limited liability company formalitiesother Person;
(vb) To conduct its own business in its own name, pay its own liabilities out of its own funds, allocate fairly and reasonably any Subsidiary or make any investment in any Personoverhead for shared employees and office space, other than the Transferred Loans and Permitted Investments, without the consent of the Administrative Agentto maintain an arm’s length relationship with its affiliates;
(vic) incur To hold itself out as a separate entity, correct any Indebtednessknown misunderstanding regarding its separate identity, secured or unsecured, direct or contingent (including guaranteeing any obligation) except (A) obligations incurred under this Agreement, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to the maintenance of its existence in good standing;
(vii) in the Borrower’s reasonable determination, 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, or become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrowerobserve all organizational formalities;
(viiid) fail Not to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ix) fail to correct any known misunderstandings regarding the separate identity of Borrower and the BDC guarantee or any principal or Affiliate thereof or any other Person;
(x) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xi) 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 with which such other party is transacting business, or (B) to suggest that it is responsible for the debts of any third party other Person (other than the other Borrowers, pursuant to the terms and conditions of the Loan Documents) or hold out its credits as being available to satisfy the obligations of others (other than the other Borrowers, pursuant to the terms and conditions of the Loan Documents), including any of its principals or Affiliates);
(xii) acquire the not acquiring obligations or securities of its Affiliates manager, members, or stockholders, except for the Transferred Loans and interests in Related Propertyofficers;
(xiiie) Not to pledge its assets to secure the Indebtedness, or for the benefit, of any other Person;
(xiv) fail at any time to have at least one independent manager (an “Independent Manager”) who: (1) is an employee of, or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an independent trustee or independent manager), officer, employee, partner, attorney or consultant of (a) the Servicer, (b) the BDC, (c) any principal of the Servicer or the BDC, (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereof; provided, however, such Independent Manager may be an independent director, independent trustee or independent manager of another special purpose entity affiliated with the BDC or the Servicer;
(xv) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that the consent of the Independent 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 the Borrower, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrower, (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 any other Person (other than the Borrower’s creditorsother Borrowers, (F) admit in writing pursuant to the Borrower’s inability to pay its debts generally as they become due, or (G) take any action in furtherance of any terms and conditions of the foregoingLoan Documents) or make any loans or advances to any Person except as may be expressly permitted under the Loan Documents;
(xviiif) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail Not to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) enter into any contract or agreement with any Personparty which is directly or indirectly controlling, controlled by or under common control with Grantor (an “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 arms-length basis with third parties other than such Personany Affiliate;
(xxiiig) except as may be required Not to seek, and to prevent any constituent party of Grantor from seeking, the dissolution or permitted by the Code and regulations winding up, in whole or other applicable state or local tax lawin part, hold itself out as of Grantor;
(h) Not to merge with or be considered as consolidated into any other entity;
(i) To maintain its assets in such a department manner that it will not be costly or division difficult to segregate, ascertain or identify its individual assets from those of (A) any constituent party of its principals Grantor, Affiliate, any Guarantor, or Affiliates, (B) any Affiliate of a principal or (C) any other Person;
; provided, however, that such assets may be deposited into the Lockbox Accounts (xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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 Affiliateas defined in the Loan Agreement); and
(xxvij) fail To have no debts or obligations other than normal accounts payable in the ordinary course of business, this Deed to file its own income 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 lawSecure Debt, and pay any taxes required to be paid under applicable lawthe Loan.
Appears in 1 contract
Separate Entity. The Borrower Buyer is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer Originator and any Affiliates thereof (other than the Borrower)thereof, and the Borrower Originator hereby acknowledges that the Administrative Trustee, the Deal Agent and the Lenders Lender under the Note Purchase Agreement are entering into the transactions contemplated by this the Note Purchase Agreement in reliance upon the BorrowerBuyer’s identity as a separate legal entity from the BDC, the Servicer Originator and from each such other Affiliate of the BDC Originator. Therefore, from and after the Servicerdate of execution and delivery of this Agreement, the Originator shall take all reasonable steps, including, without limitation, all steps that the Deal Agent or the Lender may from time to time reasonably request, to maintain the Buyer’s identity as a separate legal entity and to make it manifest to third parties that the Buyer is an entity with assets and liabilities distinct from those of the Originator and any Affiliate thereof and not just a division of the Originator or any such Affiliate. The Borrower Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, Originator shall take all reasonable steps to ensure that the Buyer has not and shall notwill not from the Closing Date to the Paid-in-Full Date:
(i) engage in any business or activity other than the ownership purchase and receipt of Transferred Loans and other Collateral and related assets, entering into this Agreement and Purchased Assets from the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunderOriginator under the Purchase Agreement, the granting pledge of Liens in Collateral Purchased Assets under the Transaction Documents, the issuance of the Note and the borrowing and securing of Advances under the Note Purchase Agreement and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (A) Transferred Loansthe Purchased Assets, the other Collateral and related assets from the BDC or (B) the Hedge Agreements and (C) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBuyer;
(iii) merge into or consolidate with any Person, dissolvePerson or dissolve (except as otherwise expressly permitted in the Note Purchase Agreement), terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than except as otherwise expressly permitted in the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15Note Purchase Agreement) or change its legal structure, without in each case first obtaining the consent of the Administrative Deal Agent’s consent;
(iv) fail to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply in any material respect with the provisions of its Certificate of Formation or its limited liability company agreement agreement, or fail to observe in any material respect limited liability company formalities;
(v) own any Subsidiary subsidiary or make any investment in any Person, other than the Transferred Loans and Permitted Investments, Person without the consent of the Administrative Deal 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) except (A) obligations incurred under this Agreement), under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident other than Indebtedness to the maintenance Secured Parties under the Note Purchase Agreement except for trade payables in the ordinary course of its existence in good standingbusiness, provided that such trade payables are not evidenced by a note and are paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) enter into any contract or agreement with any of its Affiliates, except 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;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Buyer or any principal or Affiliate thereof or any other Person;
(xxiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xixiv) 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 Purchased Assets, the Hedge Agreements, 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 Code and regulations issued thereunder;
(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 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);
(xii) acquire the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiii) pledge its assets to secure the Indebtedness, or for the benefit, of any other Person;
(xiv) fail at any time to have at least one independent manager (an “Independent Manager”) who: (1) is an employee of, or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an independent trustee or independent manager), officer, employee, partner, attorney or consultant of (a) the Servicer, (b) the BDC, (c) any principal of the Servicer or the BDC, (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereof; provided, however, such Independent Manager may be an independent director, independent trustee or independent manager of another special purpose entity affiliated with the BDC or the Servicer;
(xv) 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 members and managers (including, without limitation, the Independent Manager);
(xvixvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its organizational documents size and character and in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify light of its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documentscontemplated business operations;
(xviixviii) fail to provide that the consent of the Independent 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 file or consent to the institution filing or any petition, either voluntary or involuntary, to take advantage of bankruptcy or insolvency proceedings against the Borrower, (C) file a petition seeking or consent to reorganization or relief under any applicable federal Insolvency Law or state law relating to bankruptcy or insolvency relating to the Borrower, (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 an assignment for the benefit of the Borrower’s creditors, (F) admit in writing the Borrower’s inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) except as may be required or permitted by the Code and regulations or other applicable state or local tax lawissued thereunder, 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;
(xxivxx) other than as expressly permitted by the Note Purchase Agreement, permit any transfer (whether in any one or more transactions) of any direct ownership interest in the Buyer to the extent it has the ability to control the same, unless the Buyer delivers to the Deal Agent 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 (without limiting the foregoing, it is acknowledged that for accounting purposes, the Buyer may be consolidated with another Person as required by GAAP and included in such Person’s consolidated financial statements);
(xxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxiv) acquire the obligations or securities of its Affiliates or members;
(xxv) 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; and;
(xxvi) fail to file use separate invoices and checks bearing its own income tax returns separate from those name;
(xxvii) pledge its assets for the benefit of any other Person, except other than with respect to payment of the indebtedness to the extent Secured Parties under the Note Purchase Agreement;
(xxviii) fail at any time to have at least one (1) Independent Manager;
(xxix) fail to provide that the Borrower consent of the Independent Manager is treated as a “disregarded entity” required for tax purposes and is not required the Buyer to file tax returns under applicable law(A) dissolve or liquidate, and pay any taxes required in whole or part, or institute proceedings to be paid adjudicated bankrupt or insolvent, (B) institute or consent to the institution of Insolvency Proceedings against it, (C) file a petition seeking or consent to reorganization or relief under any applicable lawInsolvency Law, (D) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Buyer, (E) make any assignment for the benefit of the Buyer’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; and
(xxx) take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of Dechert LLP, delivered on the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Sources: Purchase and Sale Agreement (NewStar Financial, Inc.)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage in any business or activity other than the ownership of Transferred Loans and other Collateral and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (A) Transferred Loans, the other Collateral and related assets from the BDC or (B) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan Documents;
(iii) merge into or consolidate with any Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail to preserve its existence as a limited liability company, validly existing and in good standing under the laws of the State of Delaware, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply in any material respect with the provisions of its limited liability company agreement or fail to observe in any material respect limited liability company formalities;
(v) own any Subsidiary or make any investment in any Person, other than the Transferred Loans and Permitted Investments, without the consent of the Administrative Agent;
(vi) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation) except (A) obligations incurred under this Agreement, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to the maintenance of its existence in good standing;
(vii) in the Borrower’s reasonable determination, 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, or become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viii) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ix) fail to correct any known misunderstandings regarding the separate identity of Borrower and the BDC or any principal or Affiliate thereof or any other Person;
(x) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xi) 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 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);
(xii) acquire the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiii) pledge its assets to secure the Indebtedness, or for the benefit, of any other Person;
(xiv) fail at any time to have at least one independent manager (an “Independent Manager”) who: (1) is an employee of, or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Date, for a period of five (5) years prior to such date): (w) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager (other than an independent trustee or independent manager), officer, employee, partner, attorney or consultant of (a) the Servicer, (b) the BDC, (c) any principal of the Servicer or the BDC, (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereof; provided, however, such Independent Manager may be an independent director, independent trustee or independent manager of another special purpose entity affiliated with the BDC or the Servicer;
(xv) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that the consent of the Independent 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 the Borrower, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrower, (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 the Borrower’s inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvi) fail to file its own income 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
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Deal Agent and each Lender Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Deal Agent or each Lender Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement trust agreement, or fail failed to observe in any material respect limited liability company statutory trust formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Deal Agent and each Lender Agent;
(vi) incur except as permitted by this Agreement, the Lock-Box Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances and Swingline Advances owed to any of the Lenders, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Deal Agent and each Lender Agent an acceptable non–consolidation opinion and the Deal Agent and each Lender Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two independent manager trustees (each, an “Independent ManagerTrustee”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager trustee (other than an Independent Trustee), officer of employee of the Trust; (b) a director, officer or employee of American Capital Strategies, Ltd. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Trust, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Trust, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent trustees may be an independent director, independent director or trustee or independent manager of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail failed to provide that the unanimous consent of all trustees (including the consent of the Independent Manager Trustees) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;; or
(xviiixxix) except taken or refrained from taking, as contemplated by this Agreement or the other Transaction Documentsapplicable, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder each of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth activities specified in the Borrower’s limited liability company agreement and providing prior written notice non–consolidation opinion of Winston & ▇▇▇▇▇▇ LLP, dated as of the appointment of such new Independent Manager to Closing Date, upon which the Administrative Agent;
(xxii) enter into any contract or agreement with any Person, except (A) the Transaction Documents and (B) other contracts or agreements that conclusions expressed therein 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvi) fail to file its own income 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 lawbased.
Appears in 1 contract
Sources: Loan Funding and Servicing Agreement (American Capital Strategies LTD)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative AgentAgent and each Lender;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative AgentAgent and each Lender, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement operating agreement, or fail failed to observe in any material respect limited liability company formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Agent;
(vi) incur except as permitted by this Agreement, the Concentration Account Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or, except as otherwise contemplated by the Transaction Documents, held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Agent an acceptable non–consolidation opinion and the Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two independent manager directors (each, an “Independent ManagerDirector”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager director (other than an Independent Director), officer of employee of the Borrower; (b) a director, officer or employee of Patriot Capital Funding, Inc. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Borrower, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Borrower, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set forth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent directors may be an independent director, independent trustee director or independent manager director of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) fail failed to ensure provide in its operating agreement that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote consent of the members and managers all directors (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail to provide that including the consent of the Independent Manager 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvixxix) fail to file its own income tax returns separate taken or refrained from those taking, as applicable, each of any other Personthe activities specified in the non–consolidation opinion of ▇▇▇▇▇▇ & Bird 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
Sources: Loan Funding and Servicing Agreement (Patriot Capital Funding, Inc.)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement trust agreement, or fail failed to observe in any material respect limited liability company statutory trust formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Agent;
(vi) incur except as permitted by this Agreement, the Lock–Box Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreementindebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances and Expedited Advance owed to the Conduit Lender, under any Hedging Agreement required by Section 5.2(a) or the Sale and Contribution Agreement, and (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or held evidence of indebtedness issued by any other Person (other than cash and investment–grade securities);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Agent an acceptable non–consolidation opinion and the Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, except for the Transferred Loans and interests in Related Property;
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one two (2) independent manager trustees (each, an “Independent ManagerTrustee”) who: (1) is an employee of), or is a special purpose corporation each of which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager trustee (other than an Independent Trustee), officer of employee of the Trust; (b) a director, officer or employee of American Capital Strategies, Ltd. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Trust, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Trust, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this subsection 4.1(t)(xxviii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis subsection 4.1(t)(xxviii); provided, however, that such Independent Manager independent trustees may be an independent director, independent director or trustee or independent manager of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail failed to provide that the unanimous consent of all trustees (including the consent of the Independent Manager Trustees) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;
(xviii) except as contemplated by this Agreement or the other Transaction Documents, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth in the Borrower’s limited liability company agreement and providing prior written notice of the appointment of such new Independent Manager to the Administrative Agent;
(xxii) 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvixxix) fail to file its own income tax returns separate taken or refrained from those taking, as applicable, each of any other Personthe activities specified in the non–consolidation opinion of Winston & ▇▇▇▇▇▇ 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
Sources: Loan Funding and Servicing Agreement (American Capital Strategies LTD)
Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the BDC, the Servicer and any Affiliates thereof (other than the Borrower), and the Borrower hereby 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 separate legal entity from the BDC, the Servicer and from each such other Affiliate of the BDC and the Servicer. The Borrower has not and shall not:
(i) engage engaged in any business or activity other than the ownership purchase and receipt of Transferred Loans and other related Collateral from the Originator under the Purchase Agreement, the sale of Loans and related assets, entering into this Agreement and the other Transaction Documents and Loan Documents, entering into agreements and consummating transactions contemplated by Sections 2.14 and 2.15 hereof, in each case, to which it is a party, performing its duties and obligations, and exercising its rights and privileges, thereunder, the granting of Liens in Collateral under the Transaction Documents, and such other activities as are incidental or related thereto;
(ii) acquire acquired or own owned any material assets other than (Aa) Transferred Loans, the other Collateral Loans and related assets Collateral from the BDC or Originator under the Purchase Agreement and (Bb) incidental property as may be necessary for the operation of the Borrower and its performance under the Transaction Documents and performing its duties and obligations and exercising its rights and privileges thereunder and under the Loan DocumentsBorrower;
(iii) merge merged into or consolidate consolidated with any PersonPerson or dissolved, dissolve, terminate terminated or liquidate liquidated in whole or in part, transfer transferred or otherwise dispose disposed of all or substantially all of its assets (other than the collateral assignment to the Administrative Agent hereunder or as permitted under Sections 2.14 and 2.15) or change changed its legal structure, without in each case first obtaining the consent of the Administrative Deal Agent and each Lender Agent;
(iv) fail failed to preserve its existence as a limited liability companyan entity duly organized, validly existing and in good standing under the laws of the State jurisdiction of Delawareits organization or formation, or without the prior written consent of the Administrative Deal Agent or each Lender Agent, amendamended, modifymodified, terminate terminated or fail failed to comply in any material respect with the provisions of its limited liability company agreement trust agreement, or fail failed to observe in any material respect limited liability company statutory trust formalities;
(v) own owned any Subsidiary or make made any investment in any Person, (other than the Transferred purchase of Loans and Permitted Investments, pursuant to the Transaction Documents) in any Person without the consent of the Administrative Deal Agent and each Lender Agent;
(vi) incur except as permitted by this Agreement, the Lock-Box Agreement and the other Transaction Documents, commingled its assets with the assets of any Indebtednessof its Affiliates, or of any other Person;
(vii) incurred any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except ), other than (A) obligations incurred under this Agreement, under any Hedging Agreement required by Section 5.2(a) indebtedness to the Secured Parties hereunder or the Sale and Contribution Agreementin conjunction with a repayment of all Advances, and Swingline Advances and Alternative Currency Swingline Advances owed to any of the Lenders, (B) liabilities incident to obligations in respect of Hedging Agreements, (C) trade payables in the maintenance ordinary course of its existence in good standingbusiness and (D) other operating expenses; provided, that, such debt is not evidenced by a note and is paid when due;
(viiviii) in the Borrower’s reasonable determination, 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, or become insolvent or fail failed to pay its debts and liabilities from its assets as the same shall have become due; provided, that the foregoing shall not require any equity holder of the Borrower to provide capital contributions to the Borrower;
(viiiix) fail failed to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(ixx) fail entered into any contract or agreement with any Person other than as contemplated by the Transaction Documents, except 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) sought its dissolution or winding up in whole or in part;
(xii) failed to correct any known misunderstandings regarding the separate identity of Borrower and the BDC Originator or any principal or Affiliate thereof or any other Person;
(xxiii) guaranteeguaranteed, become obligated for, or hold held itself out to be responsible for the debt of another Person;
(xixiv) fail made any loan or advances to any third party, including any principal or Affiliate, or held evidence of indebtedness issued by any other Person (other than Permitted Investments and the Loans);
(xv) failed 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 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);
(xiixvi) acquire failed 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;
(xvii) filed or consented to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or made an assignment for the benefit of creditors;
(xviii) except as may be required by the Code and regulations, shared any common logo with or held itself out as or been 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;
(xix) permitted any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower shall have delivered to the Deal Agent and each Lender Agent an acceptable non–consolidation opinion and the Deal Agent and each Lender Agent shall have consented to such transfer;
(xx) failed to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person; provided, however, the Borrower’s assets and liabilities maybe included in the consolidated financial statements of American Capital for reporting purposes so long as such consolidated financial statements provide in a footnote that the Borrower is a single purpose entity and the Borrower owns its own assets, which are not available to satisfy the liabilities of any affiliated party, and is liable only for its own liabilities and not for those of any other affiliated party;
(xxi) failed to pay its own liabilities and expenses only out of its own funds;
(xxii) failed to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii) acquired the obligations or securities of its Affiliates or stockholders, stockholders (except for the Transferred Loans and interests in Related PropertyACAS Business Loan Trust Securities);
(xiiixxiv) pledge failed 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;
(xxv) failed to use separate invoices and checks bearing its own name;
(xxvi) pledged its assets to secure the Indebtedness, or for the benefit, benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xivxxvii) fail failed at any time to have at least one independent manager trustee (an “Independent ManagerTrustee”) who: (1) is an employee of), or is a special purpose corporation which is an Affiliate of, and is operated by, employees of Citadel SPV LLC, or otherwise has (x) prior experience as an independent director for a corporation, or as an independent director or independent manager for a limited liability company, whose organizational documents required the unanimous consent of all independent directors (or independent managers) 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 (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities; and (2) is not, and has not been for a period of five (5) years prior to his or her appointment as an independent manager of the Borrower (in the case of any Person so serving as of the Effective Dateand, for a period of five the immediately preceding two year period, was not (5) years prior to such date): (wa) a stockholder (whether direct, indirect or beneficial), customer, advisor, supplier, director, manager trustee (other than an Independent Trustee), officer of employee of the Trust; (b) a director, officer or employee of American Capital Strategies, Ltd. (the “Parent”) or any of its affiliates; (c) a supplier, independent trustee contractor or independent manager)any other person who derives more than 15% of its gross revenues from its activities with the Trust, the Parent and/or any affiliate of the foregoing; (d) a holder (directly or indirectly) of more than 5% of any voting securities of the Trust, the Parent or any affiliate of the foregoing; (e) a person controlling any such director, officer, employee, partnersupplier, attorney independent contractor, holder or consultant of any other person meeting the criteria set forth in clauses (a) the Servicer), (b) the BDC), (c) any principal or (d) of this Section 4.1(t)(xxvii) or (f) a member of the Servicer or immediate family of any person meeting the BDCcriteria set fourth in clauses (a), (b), (c), (d) any Affiliate of the Servicer or the BDC, or (e) any Affiliate of any principal of the Servicer or the BDC, (x) a spouse, parent, sibling or child of any Person referred to in clause (w) above, (y) an individual or other Person controlling or under common control with any such stockholder, partner, customer, supplier, employee, officer or director, or (z) a trustee, conservator or receiver for the BDC, the Servicer or any Affiliate thereofthis Section 4.1(t)(xxvii); provided, however, that such Independent Manager independent trustee may be an independent director, independent manager or trustee or independent manager of another special purpose entity affiliated with the BDC or the ServicerOriginator;
(xvxxviii) 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 members and managers (including, without limitation, the Independent Manager);
(xvi) fail to maintain its organizational documents in conformity with this Agreement, such that (1) it does not amend, restate, supplement or otherwise modify its organizational documents in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, Section 4.1(t) of this Agreement; and (2) its limited liability company agreement, at all times that this Agreement is in effect, provides for not less than five (5) Business Days’ prior written notice to the Administrative Agent of the replacement or appointment of any manager that is to serve as an Independent Manager for purposes of this Agreement and the condition precedent to giving effect to such replacement or appointment that the Borrower certify that the designated Person satisfies the criteria set forth in the definition herein of “Independent Manager”, nor fail to comply at all times in all material respects with the terms of such organizational documents;
(xvii) fail failed to provide that the unanimous consent of all trustees (including the consent of the Independent Manager Trustee) 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 the Borrowerit, (Cc) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency relating to the Borrowerinsolvency, (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 the Borrower’s its inability to pay its debts generally as they become due, or (Gg) take any action in furtherance of any of the foregoing;; or
(xviiixxix) except taken or refrained from taking, as contemplated by this Agreement or the other Transaction Documentsapplicable, commingle its funds or other assets with those of any other Person;
(xix) fail to pay the salaries of its own employees, if any; provided, however, the foregoing shall not require any equity holder each of the Borrower to make any additional capital contributions to the Borrower;
(xx) fail to maintain its assets in a way such that is not difficult to segregate and identify its assets from those of other Persons;
(xxi) appoint a new Person as the Independent Manager without first confirming such proposed new Independent Manager satisfies the definition of “Independent Manager” set forth activities specified in the Borrower’s limited liability company agreement and providing prior written notice non–consolidation opinion of Winston & ▇▇▇▇▇▇ LLP, dated as of the appointment of such new Independent Manager to Closing Date, upon which the Administrative Agent;
(xxii) enter into any contract or agreement with any Person, except (A) the Transaction Documents and (B) other contracts or agreements that conclusions expressed therein 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;
(xxiii) 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;
(xxiv) fail to pay its own liabilities and expenses only out of its own funds;
(xxv) 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; and
(xxvi) fail to file its own income 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 lawbased.
Appears in 1 contract
Sources: Loan Funding and Servicing Agreement (American Capital, LTD)