Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release), Borrower represents, warrants and covenants as follows: (a) Borrower has not and will not, and will not permit any Mortgage Loan Borrower or Maryland Owner to: (i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (E) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (F) as to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and activities incidental thereto; and (G) as to HH Annapolis LLC and HH Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto; (ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing, (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents,
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release), Borrower represents, warrants and covenants as follows:
(a) Borrower has not and will not, and will not permit any Senior Mezzanine Borrower, Mortgage Loan Borrower or Maryland Owner to:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to the Mezzanine 3 Borrower, engage in any business or activity other than the ownership of the Mezzanine 3 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto (E) as to the Mezzanine 2 Borrower, engage in any business or activity other than the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto; (F) as to the Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (G) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (EH) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (FI) as to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and activities incidental thereto; and (GJ) as to HH Annapolis LLC and HH Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing, (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents,, (E) with respect to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, its limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Annapolis LLC and HH Baltimore LLC, respectively, (F) with respect to HH Annapolis LLC and HH Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; (H) as to Mezzanine 3 Borrower, other than (1) the Mezzanine 3 Pledged Company Interests or the Mezzanine 3 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 3 Pledged Company Interests and the Mezzanine 3 Collateral; (I) as to Mezzanine 2 Borrower, other than (1) the Mezzanine 2 Pledged Company Interests or the Mezzanine 2 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral; and (J) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, or pursuant to in accordance with Section 7.6 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, (C) with respect to Mezzanine 3 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 3 Pledged Company Interest and the Mezzanine 3 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 3 Loan Agreement, (D) with respect to Mezzanine 2 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 2 Pledged Company Interest and the Mezzanine 2 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 2 Loan Agreement, or (E) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interest and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release), Borrower represents, warrants and covenants as follows:
(a) Borrower has not and will not, and will not permit any Other Senior Mezzanine Borrower, Mortgage Loan Borrower or Maryland Owner to:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to Mezzanine 2 Borrower, engage in any business or activity other than the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral and activities incidental thereto; (E) as to Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (F) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (EG) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (FH) as to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and activities incidental thereto; and (GI) as to HH Annapolis LLC and HH Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing, (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents,, (E) with respect to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, its limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Annapolis LLC and HH Baltimore LLC, respectively, (F) with respect to HH Annapolis LLC and HH Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; (H) as to Mezzanine 2 Borrower, other than (1) the Mezzanine 2 Pledged Company Interests or the Mezzanine 2 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 2 Pledged Company Interests and the Mezzanine 2 Collateral; and (I) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, or pursuant to and in accordance with Section 7.4 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, (C) with respect to Mezzanine 2 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 2 Pledged Company Interesst and the Mezzanine 2 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 2 Loan Agreement, or (D) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release), ) each Borrower and Maryland Owner represents, warrants and covenants as follows:
(a) Each of Borrower has not and Maryland Owner will not, and will not permit any Mortgage Loan Borrower or Maryland Owner to:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.6; 7.4, (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (ED) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (FE) as to HH Annapolis Holding Baltimore Holdings LLC and HH Baltimore Holdings Annapolis Holding LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Annapolis Baltimore LLC and HH Baltimore Annapolis LLC, respectively, and activities incidental thereto; and (GF) as to HH Annapolis Baltimore LLC and HH Baltimore Annapolis LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.67.4, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) with respect to HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC, LLC and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing, ; (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents,; (E) with respect to HH Baltimore Holdings LLC and HH Annapolis Holding LLC, respectively, its limited liability company interests in HH Baltimore LLC and HH Annapolis LLC and such incidental Personal Property as may be necessary for the ownership and operation of HH Baltimore LLC and HH Annapolis LLC, respectively; and (F) with respect to HH Baltimore LLC and HH Annapolis LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its Maryland Property;
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or fail to comply with the provisions of its organizational documents;
(v) own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, respectively, or pursuant to and in accordance with Section 7.4;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) with respect to Maryland Owner, the Maryland Owner Indebtedness, (C) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, that the aggregate amount of the indebtedness described in (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note and Mezzanine Notes;
(viii) fail to maintain its own separate books and records and bank accounts; except that each Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower and/or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower or Maryland Owner, or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except with respect to each other Borrower and Maryland Owner under the Loan Documents or the Indemnity Guaranty or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower and Maryland Owner and its principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Restructuring;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, that the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower or Maryland Owner is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower or Maryland Owner, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower or Maryland Owner. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower or Maryland Owner, as applicable; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower or Maryland Owner, as applicable; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower or Maryland Owner, as applicable, to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower or Maryland Owner, Borrower or Maryland Owner, as applicable, shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing of the Restructuring, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower or Maryland Owner is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower or Maryland Owner maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower and/or Maryland Owner is a single member Delaware limited liability company, the limited liability company agreement of Borrower and/or Maryland Owner (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower or Maryland Owner (“Member”) to cease to be the member of Borrower or Maryland Owner (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower or Maryland Owner and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower or Maryland Owner in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Director of Borrower or Maryland Owner shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of Borrower or Maryland Owner, automatically be admitted to Borrower or Maryland Owner (“Special Member”) and shall continue Borrower or Maryland Owner, as applicable, without dissolution and (ii) Special Member may not resign from Borrower or Maryland Owner or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to Borrower as Special Member in accordance with requirements of Delaware law and (B) such successor Special Member has also accepted its appointment as an Independent Director. The LLC Agreement shall further provide that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no interest in the profits, losses and capital of Borrower and has no right to receive any distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited Liability Company Act (the “Act”), Special Member shall not be required to make any capital contributions to Borrower and shall not receive a limited liability company interest in Borrower, (iv) Special Member, in its capacity as Special Member, may not bind Borrower and (v) except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, Borrower, including the merger, consolidation or conversion of Borrower; provided, however, that such prohibition shall not limit the obligations of Special Member, its capacity as Independent Director, to vote on such matters required by the Loan Documents or the LLC Agreement. In order to implement the admission to Borrower of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to Borrower as Special Member, Special Member shall not be a member of Borrower. Upon the occurrence of any eve
Appears in 1 contract
Sources: Mortgage Loan Agreement (Ashford Hospitality Trust Inc)
Single Purpose Entity/Separateness. Until the Debt has been paid in full (and regardless of any Property Release), Borrower represents, warrants and covenants as follows:
(a) Borrower has not and will not, and will not permit any Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner to:
(i) (A) as to the Individual Property Owners, engage in any business or activity other than the ownership, operation (including leasing such Individual Property pursuant to an Operating Lease) and maintenance of the Individual Property that it owns and activities incidental thereto, including any business related to its ownership interest in an Operating Lessee pursuant to and in accordance with Section 7.6; (B) as to the Operating Lessees, allow the Operating Lessees to engage in any business or activity other than the operation and maintenance of the Individual Property that it leases pursuant to the applicable Operating Lease and activities incidental thereto; (C) as to Borrower, engage in any business or activity other than the ownership of the Pledged Company Interests and the Collateral and any activities incidental thereto; (D) as to Mezzanine 1 Borrower, engage in any business or activity other than the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral and activities incidental thereto; (E) as to HH Gaithersburg LLC, engage in any business or activity other than (1) the ownership, operation (including leasing such Individual Property to an Operating Lessee) and maintenance of the limited liability company interests in HH Gaithersburg Borrower, LLC, (2) the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and (3) activities incidental thereto; (EF) as to HH Gaithersburg Borrower LLC, engage in any business or activity other than entering into and performing its obligations under the Loan Documents; (FG) as to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, engage in any business or activity other than the ownership and operation of the limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and activities incidental thereto; and (GH) as to HH Annapolis LLC and HH Baltimore LLC, engage in any business or activity other than the ownership, operation (including leasing such Maryland Property to an Operating Lessee) and maintenance of its respective Maryland Property and activities incidental thereto;
(ii) acquire or own any assets other than (A) as to the Individual Property Owners, its Individual Property, such incidental Personal Property as may be necessary for the ownership or operation of its Individual Property, and an Operating Lessee pursuant to and in accordance with Section 7.6, (B) as to Operating Lessee, such incidental Personal Property as may be necessary for the operation of the Individual Property that it leases, (C) HH Gaithersburg LLC, its respective Maryland Property, its limited liability company interests in HH Gaithersburg Borrower LLC, and such incidental Personal Property as may be necessary for the ownership and operation of the foregoing, (D) with respect to HH Gaithersburg Borrower LLC, incidental Personal Property as may be necessary for it to perform its obligations under the Loan Documents,, (E) with respect to HH Annapolis Holding LLC and HH Baltimore Holdings LLC, its limited liability company interests in HH Annapolis LLC and HH Baltimore LLC, respectively, and such incidental Personal Property as may be necessary for the ownership and operation of HH Annapolis LLC and HH Baltimore LLC, respectively, (F) with respect to HH Annapolis LLC and HH Baltimore LLC, its respective Maryland Property and such incidental Personal Property as may be necessary for the ownership and operation of its respective Maryland Property, (G) as to Borrower, other than (1) the Pledged Company Interests or the Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Pledged Company Interests and the Collateral; and (H) as to Mezzanine 1 Borrower, other than (1) the Mezzanine 1 Pledged Company Interests or the Mezzanine 1 Collateral, and (2) such incidental Personal Property as may be necessary for the ownership of the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral.
(iii) merge into or consolidate with any Person, change the legal structure, or sell all or substantially all of its assets or institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) or a substantial part of its property, or make any assignment for the benefit of creditors of it, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, or, to the fullest extent permitted by law, dissolve or liquidate;
(iv) fail to observe all applicable organizational formalities, fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or fail to comply with the provisions of its organizational documents;
(v) (A) with respect to Borrower, own any Subsidiary, or make any investment in, any Person other than the Pledged Company Interest and the Collateral or, pursuant to and in accordance with Section 7.6, (B) with respect to ▇▇▇▇▇ Fargo Mortgage Loan Borrower, own any subsidiary, or make any investment in, any Person other than, as to HH Annapolis Holding LLC, HH Gaithersburg LLC and HH Baltimore Holdings LLC, its respective limited liability company interest in HH Annapolis LLC, HH Gaithersburg Borrower LLC and HH Baltimore LLC, or pursuant to and in accordance with Section 7.4 of the ▇▇▇▇▇ Fargo Mortgage Loan Agreement, or (C) with respect to Mezzanine 1 Borrower, own any Subsidiary, or make any investment in, any Person other than the Mezzanine 1 Pledged Company Interests and the Mezzanine 1 Collateral or, pursuant to and in accordance with Section 7.6 of the Mezzanine 1 Loan Agreement;
(vi) except with respect to each other Borrower under the Loan Documents, commingle its assets with the assets of any other Person;
(vii) (x) with respect to Borrower, incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than the Debt, (y) with respect to Mezzanine 1 Borrower, incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) other than the “Debt” (as defined in the Mezzanine 1 Loan Agreement) or (z) with respect to Mortgage Loan Borrower (other than Maryland Owner), incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt (as defined in the ▇▇▇▇▇ Fargo Mortgage Loan Agreement), (B) with respect to the Maryland Owner, the Maryland Owner Indebtedness, (C) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date, (D) financing leases and purchase money indebtedness incurred in the ordinary course of business relating to Personal Property on commercially reasonable terms and conditions, (E) equipment financing that is not secured by a Lien on the Property other than on the equipment being financed, and/or (F) in connection with the Contribution Agreement; provided however, the aggregate amount of the indebtedness described in clauses (C), (D) and (E) shall not exceed at any time three percent (3%) of the outstanding principal amount of the Note, the Other Mezzanine Notes and the Mortgage Note;
(viii) fail to maintain its own separate books and records, and bank accounts; except that each Borrower’s, Mezzanine 1 Borrower’s, Mortgage Loan Borrower’s and Maryland Owner’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided that such consolidated financial statements contain a footnote indicating that such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner, as the case may be, is a separate legal entity and its assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any other Person and such assets shall also be listed on its own separate balance sheet;
(ix) except for capital contributions, and except for the Contribution Agreement, enter into any contract or agreement or transaction with any general partner, member, shareholder, principal, guarantor of the obligations of Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers, Maryland Owner or any Affiliate of the foregoing, except upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi) except with respect to Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers and Maryland Owner under the Loan Documents, the Mezzanine 1 Loan Documents, the Mortgage Loan Documents or the Contribution Agreement, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets to secure the obligations of any other Person or hold out its credit or assets as being available to satisfy the obligations of any other Person;
(xii) make any loans or advances to any Person, except with respect to other Borrowers under the Contribution Agreement;
(xiii) fail to pay any taxes required to be paid under applicable law or fail to file its own tax returns except to the extent such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable Legal Requirements;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or fail to correct any known misunderstanding regarding its separate identity;
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations, provided, however, the foregoing shall not require any member to make any additional capital contributions;
(xvi) if it is a partnership or limited liability company, without the unanimous written consent of all of its partners or members, as applicable, and the written consent of one hundred percent (100%) of the managers or directors of such Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrower or Maryland Owner or each SPE Component Entity (if any), including each Independent Director, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors’ Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official, or (c) make an assignment for the benefit of creditors;
(xvii) fail to allocate shared expenses (including shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses or to use separate stationery, invoices and checks bearing its own name;
(xviii) fail to remain solvent, and continue to pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, provided, however, the foregoing shall not require any member to make any additional capital contributions;
(xix) acquire obligations or securities of its partners, members, shareholders or other affiliates, as applicable;
(xx) violate or cause to be violated the assumptions made with respect to Borrower, Mezzanine 1 Borrower, Mortgage Loan Borrowers or Maryland Owner and their respective principals in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Loan;
(xxi) fail to pay the salaries of its own employees, if any, or maintain a sufficient number of employees in light of its contemplated business operations, provided, however, the foregoing shall not require any member to make any additional capital contributions;
(xxii) identify itself as a department or division of any other Person;
(xxiii) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment grade securities and amounts payable by other Borrowers under the Contribution Agreement);
(xxiv) fail to hold all of its assets in its own name;
(xxv) fail to conduct its business in its name or in a name franchised or licensed to it by a Franchisor;
(xxvi) have any obligation to indemnify, and will not indemnify, its managers, officers or members, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation; or
(xxvii) except pursuant to the terms and conditions of the Loan Documents, have any of its obligations guaranteed by an Affiliate.
(b) If Borrower is a partnership or limited liability company, each general partner in the case of a limited partnership, or the managing member in the case of a limited liability company (each an “SPE Component Entity”) of Borrower, shall be a corporation or a special purpose limited liability company that satisfies the requirements of clause (c), in either case, whose sole asset is its interest in Borrower. Each SPE Component Entity (i) will at all times comply with each of the covenants, terms and provisions contained in Section 6.1(a)(iii) - (vi) and (viii) - (xxvii), as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in Borrower; (iii) will not acquire or own any assets other than its partnership, membership, or other equity interest in Borrower; (iv) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (v) will cause Borrower to comply with the provisions of this Section 6.1 and Section 6.4. Prior to the withdrawal or the disassociation of any SPE Component Entity from Borrower, Borrower shall immediately appoint a new general partner or managing member whose articles of incorporation or limited liability company agreement are substantially similar to those of such SPE Component Entity and, if an opinion letter pertaining to substantive consolidation was required at closing, deliver a new opinion letter acceptable to Lender and the Rating Agencies with respect to the new SPE Component Entity and its equity owners. Notwithstanding the foregoing, to the extent Borrower is a single member Delaware limited liability company that satisfies the requirements of clause (c), so long as Borrower maintains such formation status, no SPE Component Entity shall be required.
(c) In the event Borrower is a single member Delaware limited liability company, the limited liability company agreement of Borrower (the “LLC Agreement”) shall provide that (i) upon the occurrence of any event that causes the sole member of Borrower (“Member”) to cease to be the member of Borrower (other than (A) upon an assignment by Member of all of its limited liability company interest in Borrower and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of Borrower in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independ
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)