Common use of Separateness Requirements Clause in Contracts

Separateness Requirements. (a) Notwithstanding any provision in this Agreement to the contrary, in order to preserve and ensure its separate and distinct identity, in addition to the other provisions set forth in this Agreement, the Company has conducted and shall conduct its affairs in accordance with the following provisions (all statements which follow which refer to past conduct shall be applicable to all times since the Company’s formation and all statements which refer to future conduct shall be applicable at all times during the Covered Period): (i) The Company has not owned, does not own and will not own any asset or property other than (i) the Property, and (ii) incidental personal property necessary for the ownership or operation of the Property. (ii) The Company will not engage in any business other than to purchase, own, hold, sell, trade, assign, transfer, operate, develop, lease, manage, mortgage, pledge and otherwise operate and deal with the Property and to enter into and perform its obligations under the Equity Wrap Documents. (iii) Except as permitted by Equity Wrap Documents, the Company has not entered into and will not enter into any contract or agreement with (i) any Affiliate of the Company, (ii) any constituent party of the Company, (iii) any guarantor (an “Indemnitor”) of the Obligations or any part thereof, or (iv) any Affiliate of any constituent party of the Company or any Indemnitor, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s length basis with third parties other than any such party. The Company has maintained and will maintain an arm’s length relationship with its Affiliates. (iv) The Company will not incur, create or assume any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) unsecured trade payables incurred in the ordinary course of its business of owning and operating the Property, provided that such trade payables (A) are not evidenced by a note, and (B) are not, unless being contested in accordance with the terms of the Deed of Trust, outstanding for more than sixty (60) days from the date incurred with trade creditors and are in amounts as are normal and reasonable under the circumstances, and (ii) such other indebtedness that is permitted by the Equity Wrap Documents. No indebtedness may be secured (senior, subordinate or pari passu) by the Property. Notwithstanding any other provision in this Section 21(a)(iv), the Company may, during the Covered Period, (i) incur the Obligations, and (ii) enter into and perform the Equity Wrap Documents, including, without limitation, the Deed of Trust, and all other documents, agreements, instruments, certificates and financing statements contemplated thereby or related thereto. (v) The Company has not made and will not make any loans or advances to any third party (including any Affiliates of the Company or any Indemnitor), shall not pledge its assets for the benefit of any other Person (other than pledges of Property to the Owner Participant and any of its successors in interest under the Deed of Trust) and shall not acquire obligations or securities of its Affiliates. (vi) The Company has been, is and will remain solvent and shall not incur any indebtedness which the Company will not be able to repay when due, and the Company has paid and will pay its debts and liabilities from its own assets as the same shall become due. The Company agrees to give prompt notice to Owner Participant of the insolvency or bankruptcy filing of the Company or any equity member of the Company, and of the death, insolvency or bankruptcy filing of any Indemnitor. (vii) The Company has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence as a single purpose limited liability company. (viii) The Company has maintained and will maintain all of its books, records, financial statements and bank accounts in its own name and separate from those of its Affiliates and any constituent party of the Company. The Company has prepared and maintained and will prepare and maintain its financial records and accounts in accordance with sound accounting principles consistently applied and susceptible to audit. (ix) The Company has been and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate thereof) including any member of the Company or any Affiliate of any member of the Company, shall correct any known misunderstanding regarding its status as a separate entity, has conducted and shall conduct business in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of the other, and shall maintain and utilize separate stationery, invoices and checks. (x) The Company will file its own tax returns or, if the Company is part of a consolidated group for purposes of filing tax returns, the Company will be shown as a separate member of such group. Notwithstanding the foregoing, if the Company is owned by the Equity Member, the Company will report its taxable income or loss as part of the separate company information of Equity Member for inclusion in the Equity Member’s consolidated income tax return, or as applicable law otherwise permits or requires. (xi) The Company will retain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (the Company shall be permitted to distribute any remaining cash after payment of its current obligations and funding of appropriate operating reserves). (xii) To the fullest extent permitted by law, neither the Company nor any constituent party of the Company will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Company. (xiii) The Company has not and will not commingle the funds and other assets of the Company with those of any Affiliate or constituent party of the Company, any Indemnitor, any Affiliate of any such constituent party or Indemnitor, or any other Person. (xiv) The Company has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party of the Company, any Indemnitor, any Affiliate of any such constituent party or Indemnitor, or any other Person. (xv) The Company does not and will not guarantee, become obligated for or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person except as permitted by the Equity Wrap Documents. The Company has not and will not hold its assets out as being available for the payment of any liability of any other Person. (xvi) The Company will not permit any Affiliate, except in the role as property manager satisfying the requirements of the Deed of Trust, independent access to its bank accounts. (xvii) The Company has paid and shall pay the salaries of its own employees from its own funds. (xviii) The Company has allocated and shall allocate fairly and reasonably any overhead for any office space which the Company shares with any other Person. (b) Notwithstanding any provision hereof to the contrary, during the Covered Period, the Equity Member shall not: (i) hold its credit out as available to pay the debts of the Company; (ii) pay the debts of the Company; (iii) hold itself out other than as a separate and distinct entity from the Company; or (iv) hold its assets in the Company’s name. Failure of the Company, or a Member, Manager or Officer on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of a Member. The Members hereby agree that the entering into and performance by the Company of the Equity Wrap Documents in accordance with the terms and conditions thereof shall not be deemed to have caused the Company to have violated, or to have failed to comply with, any of the foregoing covenants set forth in this Section 21 or any other covenants contained in this Agreement.