Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto and until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debt: (i) It has not owned and will not own any property or any other assets other than (A) with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties; (ii) It was formed solely for the purpose of engaging in, and has not engaged and will not engage in, any business other than the ownership, leasing, management, financing and operation of the Properties; (iii) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm's-length basis with third parties; (iv) It will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than the Debt and the indebtedness described in clauses (iii) and (vi) of the definition of Permitted Indebtedness may be secured (subordinate or pari passu) by any personal property; (v) Other than as provided in the Loan Documents, it will not make any loans or advances to, and it will not pledge its assets for the benefit of, any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party; (vi) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due; (vii) It has done or caused to be done and will do all things necessary to observe limited liability company formalities (in all material respects), as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity; (viii) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person); (ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate; (x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (xi) To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part; (xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts; (xiii) It has 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 or any Affiliate of any constituent party or any other Person; (xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person; (xv) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable); (xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors; (xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties; (xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects; (xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts; (xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations; (xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and (xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as since its date of the date hereof, at all times prior hereto formation and continuing until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debt:
(ia) It has not owned and will not own any property or any other assets other than (A) with respect to the Borrower, the Properties Property currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing ownership or operation of the PropertiesProperty;
(iib) It was formed solely for the purpose of engaging in, and has not engaged and will not engage in, any business other than the ownership, leasing, management, financing and operation of the PropertiesProperty;
(iiic) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases)Affiliates, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm'sarm’s-length basis with third parties;
(ivd) It has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no No indebtedness other than the Debt and the indebtedness described in clauses (iiiclauses(v) and (vi) of the definition of Permitted Indebtedness may be secured (subordinate or pari passu) by the Property and no indebtedness other than the Debt may be secured (subordinate or pari passu) by any personal property;
(ve) Other than as provided in the Loan Documents, it has not made and will not make any loans or advances to, and it has not pledged its assets and will not pledge its assets for the benefit of, any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vif) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(viig) It has done or caused to be done and will do all things necessary to observe limited liability company formalities (in all material respects)laws, as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law)formation, limited liability company operating agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity;
(viiih) It has and will continue to maintain books and records, financial statements and accounts separate and apart from those of any other Person and it has and will continue to file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);
(ixi) It has been and will becontinue to, and at all times has held and will continue to hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall continue to conduct business in its own name, has and shall continue to exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it has and will continue to reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(xj) It has and will continue 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;
(xik) To the fullest extent permitted by law, neither Neither it nor any constituent party has nor or will seek any Borrower's or Operating Lessee's ’s dissolution or winding up, in whole or in part;
(xiil) It does has not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve AccountsPerson;
(xiiim) It has 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 or any Affiliate of any constituent party or any other Person;
(xivn) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does It has not held and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xvo) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "“SPE Member"”) that is a corporation (or other entity that is an Single Purpose Entity that complies with the Rating Agency requirements) whose sole assets are asset is its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating LesseeBorrower, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) 4.1.28 with respect to the SPE Member, and the SPE Member shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors Directors) as a duly appointed members member of its board of directors or managers, as applicable (or, if such SPE Member is not a corporation, otherwise comply with the Independent Director requirements of the Rating Agencies) or (b) it shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors on Directors) as a non economic member in such limited liability company or if such limited liability company is managed by a board of managers or a board of directors, as a duly appointed member of its board of managers or board of directors (directors, as applicable);
(xvip) It has and shall, at all times, have a limited liability company an operating agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debtoutstanding, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member an SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with one (1) (or if required in connection with a Securitization, two (2)) non-economic member as Independent Directors on Director, each of its board of directorsmembers (including the non-economic member)) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreementincorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least one member (or if required in connection with a Securitization, two members of such board members) (including, if applicable, the non-economic members) who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managedwith an SPE Member, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms hereinentity; (C) engage in any business other than the ownership, maintenance and operation of the Properties Property or, with respect to the SPE Member (if applicable)Member, acting as a member of a Borrower or Operating Lesseethe Borrower; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any the Borrower or Operating Lessee or of any substantial part of their its property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's ’s certificate of incorporation (if applicable) or the limited liability company operating agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose EntityBorrower; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's ’s business; or (G) withdraw the SPE Member, if applicable, Member or remove the two (2) non-economic members who are Independent Directors of the Borrower. With respect to a Borrower or Operating Lessee; providedlimited liability company with one (1) Independent Director (or, howeverif required in connection with a Securitization, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors) as a non-economic member, the affirmative consent of each Independent Director shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable). With respect to a limited liability company with an SPE Member, the affirmative consent of all of the members of such limited liability company, including the SPE Member shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable);
(xviiq) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the PropertiesProperty;
(xviiir) Each Borrower has and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan have been and shall at all times be true and correct in all respects;
(xixs) No Borrower or Operating Lessee has not and will not permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accountsaccounts;
(xxt) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and has and shall maintain a sufficient number of employees in light of its contemplated business operations;
(xxiu) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and has paid and shall continue to pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the any Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and;
(xxiiv) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date; and
(w) Borrower has and will continue to observe all applicable limited liability company formalities in all material respects.
Appears in 1 contract
Sources: Loan Agreement (Colony Resorts LVH Acquisitions LLC)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto hereof and until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debt:
(ia) It has not owned and will not own any property or any other assets other than (A) with respect to the Borrower, the Properties Property currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing ownership or operation of the PropertiesProperty;
(iib) It was formed solely for the purpose of engaging in, and has not engaged and will not engage in, any business other than the ownership, leasing, management, financing and operation of the PropertiesProperty;
(iiic) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases)Affiliates, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm'sarm’s-length basis with third parties;
(ivd) It has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no No indebtedness other than the Debt and the indebtedness described in clauses (iiiclauses(v) and (vi) of the definition of Permitted Indebtedness may be secured (subordinate or pari passu) by the Property and no indebtedness other than the Debt may be secured (subordinate or pari passu) by any personal property;
(ve) Other than as provided in the Loan Documents, it has not made and will not make any loans or advances to, and it has not pledged its assets and will not pledge its assets for the benefit of, any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vif) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(viig) It has done or caused to be done and will do all things necessary to observe limited liability company formalities (in all material respects)laws, as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law)formation, limited liability company operating agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity;
(viiih) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);
(ixi) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(xj) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xik) To the fullest extent permitted by law, neither Neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's ’s dissolution or winding up, in whole or in part;
(xiil) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve AccountsPerson;
(xiiim) It has 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 or any Affiliate of any constituent party or any other Person;
(xivn) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does It has not held and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xvo) If it is a limited liability company, either (a) within thirty (30) days after the Closing Date either at least one of its members is and shall be a Single Purpose Entity (the "“SPE Member"”) that is a corporation whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating LesseeBorrower, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) 4.1.28 with respect to the SPE Member, and the SPE Member shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors Directors) as a duly appointed members member of its board of directors or managers, as applicable, or (b) subject to the following sentence, it shall have one (1) Independent Director (or, if required in connection with a Securitization, two (2) Independent Directors on Directors) as a non economic member in such limited liability company or if such limited liability company is managed by a board of managers or a board of directors, as a duly appointed member of its board of managers or board of directors (directors, as applicable). Borrower shall have a period of thirty (30) days following the Closing Date to file all necessary applications with the Gaming Authorities in order to appoint an Independent Director to its board of managers or board of directors, as applicable, provided, Borrower and its members shall have taken or caused to be taken all other actions required for the appointment of such Independent Director to its board of managers or board of directors, as applicable, and Borrower shall diligently continue to obtain any required approvals from the Gaming Authority with respect to the appointment of such Independent Director;
(xvip) It has and shall, at all times, have a limited liability company an operating agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debtoutstanding, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member an SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with one (1) (or if required in connection with a Securitization, two (2)) non-economic member as Independent Directors on Director, each of its board of directorsmembers (including the non-economic member)) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreementincorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least one member (or if required in connection with a Securitization, two members of such board members) (including, if applicable, the non-economic members) who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managedwith an SPE Member, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms hereinentity; (C) engage in any business other than the ownership, maintenance and operation of the Properties Property or, with respect to the SPE Member (if applicable)Member, acting as a member of a Borrower or Operating Lesseethe Borrower; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any the Borrower or Operating Lessee or of any substantial part of their its property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's ’s certificate of incorporation (if applicable) or the limited liability company operating agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose EntityBorrower; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's ’s business; or (G) withdraw the SPE Member, if applicable, Member or remove the two (2) non-economic members who are Independent Directors of the Borrower. With respect to a Borrower or Operating Lessee; providedlimited liability company with one (1) Independent Director (or, howeverif required in connection with a Securitization, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors) as a non-economic member, the affirmative consent of each Independent Director shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable). With respect to a limited liability company with an SPE Member, the affirmative consent of all of the members of such limited liability company, including the SPE Member shall be required prior to instituting any of the actions described in clauses (A) through (G) above (as applicable);
(xviiq) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the PropertiesProperty;
(xviiir) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xixs) No Borrower or Operating Lessee will not permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accountsaccounts;
(xxt) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxiu) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the any Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and;
(xxiiv) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date; and
(w) Borrower will observe all applicable limited liability company formalities in all material respects.
Appears in 1 contract
Sources: Loan Agreement (Colony Resorts LVH Acquisitions LLC)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto hereof and until such time as the Debt Indebtedness shall be paid in full full, except as otherwise provided herein, in the other Loan Documents or its property in the Consulting Agreement, the Borrower, and if Borrower is no longer subject to a limited partnership, the Lien securing the Debtgeneral partner of Borrower:
(i) It has does not owned own and will shall not own any property or any other assets asset other than (A) with respect to the Property or, in the case of a general partner, its interest in Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) It was formed solely for the purpose of engaging in, and has is not engaged and will shall not engage in, in any business other than those necessary for the ownership, leasinguse, management, financing and management or operation of the Properties;
(iii) It has not such Individual Property and any transactions entered and will not enter into any contract or agreement in connection with such business with any Affiliate of its Affiliates (Borrower or the general partner, other than any such transactions embodied in the Loan Documents and the Operating Leases)Consulting Agreement, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are shall be entered into upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm'sarms-length basis with third partiesparties other than an Affiliate of Borrower or such general partner;
(iviii) It will has not incur incurred, created or assumed any indebtednesscurrently outstanding debt, and shall not incur, create or assume any debt, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth , trade indebtedness incurred in the immediately preceding sentenceordinary course of the Borrower's or the general partner's business (including the financing of insurance premiums) and the Permitted Encumbrances, no indebtedness other than the Debt except as may be secured otherwise expressly permitted hereunder;
(subordinate iv) has not made any currently outstanding, and shall not make any, loans or pari passu) by advances to any Property and no indebtedness other than the Debt and the indebtedness described in clauses third party (iii) and (vi) including any Affiliate of the definition of Permitted Indebtedness may be secured (subordinate Borrower or pari passu) by any personal propertysuch general partner);
(v) Other than as provided in the Loan Documents, it will not make any loans or advances to, and it will not pledge its assets for the benefit of, any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), is and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vi) It is and will remain be solvent and it will pay paying its debts and liabilities (including employment including, as applicable, reasonable allocations of personnel and overhead expenses) from its assets as the same shall become due;
(viivi) It has done or caused to be done and will shall do or cause to be done all things necessary to observe limited liability company formalities (in all material respects), as the case may be, and preserve its existence, and it will shall not, nor will it permit or suffer shall any constituent party to general partner thereof, as applicable, amend, modify or otherwise change its partnership certificate, articles of incorporation or by-laws or partnership agreement, certificate as applicable without the prior written consent of formation Lender, in its sole discretion;
(except vii) shall observe all corporate or partnership formalities, as required by law)applicable, limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect conduct and operate its existence business as a Single Purpose Entitypresently conducted and operated;
(viii) It has and will shall maintain books and records, financial statements records and bank accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from or any other Person);
(ix) It has and will shall maintain a separate business office at the Property;
(x) shall be, and at all times has held and will shall hold itself out to the public as, a legal entity separate and distinct from any other entity (entity, including any of Affiliate thereof, provided that Borrower may identify its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared Property as associated with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliatethe applicable Franchisor;
(xxi) It has and will shall file its own tax returns, if required by the Code;
(xii) shall 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;
(xixiii) To shall not seek or consent to the fullest extent permitted by lawliquidation, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part, of Borrower or the general partner, nor enter into any consolidation, merger, joint venture, syndication or other combination;
(xiixiv) It does not and will shall not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability companyhas caused, either (a) and at all times shall cause, there to be at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each duly appointed member of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (an "Independent Director") of Borrower or the general partner who has not been at the time of such individual's appointment, and may not have been at any time during the preceding two years (A) a stockholder of, or an officer, director (other than with respect to such Independent Director's service as applicabledirector of Borrower or the general partner) or employee of, Borrower or any of its Affiliates, or the general partner or any of its Affiliates, (B) a customer or supplier to Borrower or any of its Affiliates, or to the general partner or any of its Affiliates, (C) a person or other entity controlling any such stockholder, supplier or customer, or (D) a member of the immediate family of any such stockholder, officer, employee, supplier or customer or any other director of Borrower or the general partner. As used in this subsection (dd), the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
(xvi) It has not caused, and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Membershall not cause, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted the general partner to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreementincorporation, by-laws or any voting trust agreement with respect to any Borrower's common stock, requires the unanimous affirmative vote of its one hundred percent (100%) of the members of the board of directors, unless at the time of such action there shall be at least two members of such board one member who are is an Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent DirectorsDirector;
(xvii) It has no liabilitiesshall comply with the provisions of its articles of incorporation or by-laws or partnership agreement, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;as applicable; and
(xviii) Each shall use separate and distinct invoices and stationery and checks that indicate, by printed or typed identification, that Borrower and Operating Lessee shall conduct its business so that is the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds entity for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee which payment is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Datemade.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of that (i) since the date hereof, of each Mortgage Borrower’s formation and at all times prior hereto on and after the date hereof and until such time as the Debt shall be paid in full or its property is no longer subject full, each Mortgage Borrower has been, and Borrower will cause each Mortgage Borrower to be, in compliance with the Lien securing single purpose entity requirements set forth in Section 5.1.14 of the DebtMortgage Loan Agreement and (ii) since the date of Borrower’s formation and at all times on and after the date hereof and until such time as the Debt shall be paid in full, Borrower shall be a Person, other than an individual, that:
(ia) It has not owned and will not own any property is formed or any other assets other than (A) with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) It was formed organized solely for the purpose of engaging inholding, and has not engaged and will directly or indirectly, an ownership interest in the Mortgage Borrowers;
(b) does not engage in, in any business other than the ownership, leasing, management, financing ownership and operation management of the PropertiesMortgage Borrowers;
(iiic) It has does not entered have any (i) assets other than those related to its interest in the Mortgage Borrower(s) or (ii) Indebtedness (except for the Debt and will any Permitted Indebtedness);
(d) does not guarantee or otherwise become liable on or in connection with any obligation of any other Person;
(e) does not enter into any contract or agreement with any stockholder, partner, principal, member or Affiliate of its Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent parties such Person or any Affiliate of any constituent partysuch stockholder, partner, principal, member or Affiliate except contracts or agreements that are upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm's-arm’s length basis with third partiesparties other than an Affiliate;
(ivf) It will does not incur incur, create or assume any indebtedness, secured or unsecured, direct or indirect, absolute or contingent Indebtedness (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than except for the Debt and the indebtedness described in clauses (iii) and (vi) of the definition of any Permitted Indebtedness may be secured (subordinate or pari passu) by any personal propertyIndebtedness;
(vg) Other than as provided in the Loan Documents, it will does not make any loans or advances to, and it will not pledge its assets for the benefit of, to any other Person (including including, without limitation, any Affiliate or constituent party or any Affiliate of any constituent partyAffiliate), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vih) It is and will remain solvent and it will does not become insolvent or fail to pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(viii) It has done or caused does not fail to be done conduct and will do all things necessary to observe limited liability company formalities (operate its business in all material respects), respects as the case may be, previously conducted and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entityoperated;
(viiij) It has and will does not fail to pay its debts from its assets as the same shall become due;
(k) does not fail to maintain its books and records, financial statements records and bank accounts separate and apart separately from those of any other Person and it will file its own tax returns Affiliates, including, without limitation, its general partners or members, as may be applicable;
(except l) does not fail at all times to hold itself out to the extent consolidation is required under GAAP, permitted for tax purposes or public as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts entity separate and apart from any other Person);
Person (ix) It has and will beincluding, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliateswithout limitation, any Affiliate (including, without limitation, any stockholder, partner, member, trustee, beneficiary, or other owner of its constituent parties such Borrower or any Affiliate of any constituent partysuch stockholder, partner, member, trustee, beneficiary, or other owner), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(xm) It has does not fail to file its own tax returns to the extent that it is legally required to do so (Borrower shall file its own tax returns and will shall not file a consolidated federal income tax return with any other Person, except that Borrower’s tax returns may include the Mortgage Borrowers, if applicable);
(n) does not fail to maintain adequate capital for the its normal obligations obligations, reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xio) To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part;
(xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has and will fail to maintain its assets in such a manner that it will is not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person;
(xivp) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations Indebtedness of any other Person;
(xvq) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers set forth in the organizational documentation (and separateness if a partnership, that of each general partner, and if a limited liability company, that of the managing member (or if there is no managing member, the members)) as in effect on the date hereof;
(r) holds all of its assets in its own name and does not commingle its assets with the assets of any other Person;
(s) utilizes such Borrower’s own letterhead, invoices and checks, provided however that Borrowers utilizes a central account containing revenue of each of the Properties which account is used only to pay expenses related solely to the Properties;
(t) holds title to its interest in the Mortgage Borrowers in its own name;
(u) allocates fairly and reasonably any overhead expenses that are shared with any Affiliate including, without limitation, paying for office space and services performed by any employee of any Affiliate;
(v) does not pledge its assets for the benefit of any other Person, other than pursuant to the Loan Documents as security for the Loan;
(w) corrects any known misunderstandings regarding its separate identity;
(x) has Organizational Documents that shall provide that the business and affairs of Borrower shall be managed by Plymouth Industrial 20 Financial, subject to the rights of TL Member set forth in Borrower’s Organizational Documents, or under the direction of a board of one or more directors or managers designated by Plymouth Industrial 20 Financial, subject to the rights of TL Member set forth in Borrower’s Organizational Documents, and at all times there shall be at least two (2) duly appointed individuals on the board of directors or managers (each, an “Independent Manager”) of Borrower, each of whom (i) has at least three (3) years prior employment experience and continues to be employed as an independent director, independent manager or independent member by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, S▇▇▇▇▇▇ Management Company, Lord Securities Corporation or, if none of those companies is then providing professional independent directors, independent managers and independent members, another nationally-recognized company that provides such services and which is reasonably approved by Lender; (ii) is not on the board of directors or managers of more than two (2) Affiliates of Borrower; and (iii) is not, and has never been, and will not, while serving as an Independent Manager be, any of the following: (A) a stockholder, director, manager, officer, employee, partner, member, attorney or counsel of Borrower, any Affiliate of Borrower or any direct or indirect equity holder of any of them, (B) a creditor, customer, supplier, service provider (including provider of professional services) or other Person who derives any of its purchases or revenues from its activities with Borrower or any Affiliate of Borrower (other than a nationally-recognized company that routinely provides professional independent directors, independent managers or independent members and other corporate services to Borrower or any Affiliate of Borrower in the ordinary course of its business), (C) a member of the immediate family of any such stockholder, director, manager, officer, employee, partner, member, creditor, customer, supplier, service provider or other Person, or (D) a Person controlling or under common control with any of (A), (B) or (C) above. A natural person who satisfies the foregoing definition other than clause (iii) shall not be disqualified as a result of clause (iii)(A) by reason of (I) being, having been or becoming an Independent Manager of an Affiliate of Borrower that is not in the direct chain of ownership of Borrower or Plymouth Industrial 20 Financial and that is required by a creditor to be a “single purpose entity”; provided that such Independent Manager is, was or will be employed by a company that routinely provides professional independent directors, independent managers or independent members, or (II) being, having been or becoming a member of Borrower pursuant to an express provision in Borrower’s operating agreement providing for the appointment of such Independent Manager as a member of Borrower upon the occurrence of any event pursuant to which Plymouth Industrial 20 Financial ceases to be a member of Borrower (including the withdrawal or dissolution of Plymouth Industrial 20 Financial). A natural person who satisfies the foregoing definition other than clause (iii) shall not be disqualified as a result of clause (iii)(A) or (iii)(B) by reason of being, having been or becoming an Independent Manager of a “single purpose entity” affiliated with Borrower; provided that the fees or other compensation that such individual earns by serving as an Independent Manager of one or more Affiliates of Borrower in any given year constitute, in the aggregate, less than five percent (5%) of such individual’s income for such year. The Organizational Documents of Borrower shall provide that no Independent Manager of Borrower may be removed or replaced without Cause, and unless Borrower provides Lender with not less than three (3) Business Days’ prior notice of (1) any proposed removal of any Independent Manager, together with a statement as to the reasons for such removal, and (2) the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements set forth in the Organizational Documents of Borrower relating to an Independent Manager. In addition, the Organizational Documents of Borrower shall provide an express acknowledgment that Lender is an intended third-party beneficiary of the “special purpose” and “separateness” provisions of such Organizational Documents. As used in this paragraph, the term “single purpose entity” shall mean a Person whose Organizational Documents contain, and who covenants that such Person shall comply or cause compliance with, provisions substantially similar to those set forth in this Section 3.1.24;
(y) has Organizational Documents that shall provide that Plymouth Industrial 20 Financial or the board of directors or managers of Borrower shall not take any action which, under the terms of any Organizational Documents (including, if applicable, any voting trust agreement with respect to any common stock), requires a unanimous vote of the board of directors or managers or the unanimous vote of the Plymouth Industrial 20 Financial and the Independent Managers of Borrower unless, at the time of such action, there shall be at least two (2) Independent Managers serving in such capacity (and such Independent Managers have participated in such vote). The Organizational Documents of Borrower shall provide that Borrower will not (and Borrower agrees that it will not), without the consent of each Independent Manager, (i) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, (ii) seek or consent to the appointment of a receiver, liquidator or any similar official for Borrower or a substantial portion of its organizational documentation assets or properties, (iii) make a general assignment for the benefit of creditors, (iv) admit publicly or in writing to any creditor Borrower’s inability to pay its debts generally as they become due, (v) declare or effectuate a moratorium on the payment of any obligations, or (vi) take any action in furtherance of any of the foregoing. In addition, the Organizational Documents of Borrower shall provide that, when voting with respect to any of the matters set forth in the immediately preceding sentence of this Section 3.1.24(p), the Independent Managers shall consider only the interests of Borrower, including its creditors to the fullest extent permitted by law;
(z) if Borrower is a single member limited liability company, has Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding, upon the occurrence of any event that causes Plymouth Industrial 20 Financial to cease to be a member of Borrower (other than (i) upon an assignment by Plymouth Industrial 20 Financial of all of its limited liability company interests in Borrower and the admission of the transferee, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents, or (ii) the resignation of Plymouth Industrial 20 Financial and the admission of an additional member of Borrower, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents), each of the persons acting as an Independent Manager of Borrower shall, without any action of any Person and simultaneously with Plymouth Industrial 20 Financial ceasing to be a member of Borrower, automatically be admitted as a member of Borrower (a “Special Member”) and shall preserve and continue the existence of Borrower without dissolution. The Organizational Documents of Borrower shall further provide that for so long as any portion of the Debt is outstanding, no Special Member may resign or transfer its rights as a Special Member unless (A) a successor Special Member has been admitted to Borrower as a Special Member, and (B) such successor Special Member has also accepted its appointment as an Independent Manager of Borrower;
(aa) shall have Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding, except as expressly permitted pursuant to the terms of the Loan Documents, (i) Plymouth Industrial 20 Financial may not resign (unless it conveys its entire ownership interest in Borrower to TL Member (as hereinafter defined), and (ii) no additional member shall be admitted to Borrower;
(bb) shall have Organizational Documents that shall provide that, as long as any portion of the Debt remains outstanding: (i) Borrower shall be dissolved, and its affairs shall be wound up, only upon the first to occur of the following: (A) the termination of the legal existence of the last remaining member of Borrower or the occurrence of any other event which terminates the continued membership of the last remaining member of Borrower in Borrower unless the business of Borrower is continued in a manner permitted by its operating agreement or the Delaware Limited Liability Company Act (the “Act”), or (B) the entry of a decree of judicial dissolution under Section 18-802 of the Act; (ii) upon the occurrence of any event that causes the last remaining member of Borrower to cease to be a member of Borrower or that causes Plymouth Industrial 20 Financial to cease to be a member of Borrower (other than (A) upon an assignment by Plymouth Industrial 20 Financial of all of its limited liability company interests in Borrower and the admission of the transferee, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents, or (B) the resignation of Plymouth Industrial 20 Financial and the admission of an additional member of Borrower, if permitted pursuant to the Organizational Documents of Borrower and the Loan Documents), to the fullest extent permitted by law, the personal representative of such last remaining member shall be authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in Borrower, agree in writing (1) to continue the existence of Borrower, and (2) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of Borrower, effective as of the Closing Date.occurrence of the event that terminated the continued membership of such member in Borrower; (iii) the bankruptcy of Plymouth Industrial 20 Financial or a Special Member shall not cause such Plymouth Industrial 20 Financial or Special Member to cease to be a member of Borrower and upon the occurrence of such event, the business of Borrower shall continue without dissolution; (iv) in the event of the dissolution of Borrower, Borrower shall conduct only such activities as are necessary to wind up its affairs (including the sale of its assets and properties in an orderly manner), and its assets and properties shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act; and (v) to the fullest extent permitted by applicable law, each of Plymouth Industrial 20 Financial and Special Members shall irrevocably waive any right or power that they might have to cause Borrower or any of its assets or properties to be partitioned, to cause the appointment of a receiver for all or any portion of the assets or properties of Borrower, to compel any sale of all or any portion of the assets or properties of Borrower pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in e
Appears in 1 contract
Sources: Mezzanine Loan Agreement (Plymouth Industrial REIT Inc.)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto hereof and until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debtfull:
(i) It has not owned and will not own any property or any other assets other than (A) with respect to the Borrower, the Mortgaged Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing ownership or operation of the Mortgaged Properties;.
(ii) It was formed solely for the purpose of engaging in, and has not engaged and will not engage in, in any business other than the ownership, leasing, management, financing and operation of the Mortgaged Properties;.
(iii) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases)Affiliates, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm's-length basis with third parties;.
(iv) It has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than the Debt and the indebtedness described in clauses (iii) and (vi) of the definition of Permitted Indebtedness may be secured (subordinate or pari passu) by any personal property;Mortgaged Property.
(v) Other than as provided in the Loan Documents, it It has not made and will not make any loans or advances to, and it will not pledge its assets for the benefit of, to any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;.
(vi) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;.
(vii) It has done or caused to be done and will do all things necessary to observe limited liability company corporate formalities (in all material respects), as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust bylaws or other organizational documents documents, or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity;.
(viii) It has and will maintain books and records, financial statements records and bank accounts separate and apart from those of its Affiliates and any other Person constituent party and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);.
(ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has name and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate pay to any overhead Affiliate that is shared with any Affiliate, including, but not limited to, paying incurs costs for shared office space and administrative services performed by any officer or employee that it uses, the amount of an Affiliate;such costs allocable to its use of such office space and administrative services.
(x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;.
(xi) To the fullest extent permitted by law, neither Neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's its dissolution or winding up, in whole or in part;.
(xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;Person.
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;.
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does It has not held and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities debts or obligations of any other Person;.
(xv) If it is a limited liability company, either (a) It shall at all times cause there to be at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members member of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managedpartnership, the board of directors of its SPE Membergeneral partner) may(an "INDEPENDENT DIRECTOR") reasonably satisfactory to Lender who shall not have been at the time of such individual's appointment, and may not have been at its discretion, be permitted to take any action without regard to time during the preceding clause five (5) years, nor shall be, so long as any portion of this sentence other than the following actionsDebt remains outstanding, which actions may not be taken: (Ai) to the fullest extent permitted by lawa shareholder or director of, dissolve or liquidatean officer or employee of, in whole Borrower or in part; of Borrower's shareholders, subsidiaries or Affiliates, (Bii) consolidate a customer of, or merge with supplier or into service provider (including professionals) to, Borrower or any of Borrower's shareholders, subsidiaries or Affiliates such that such individual's annual revenues derived from Borrower, its shareholders or Affiliates exceeds ten percent (10%) of such individual's annual revenues, (iii) a person or other entity controlling any such shareholder, supplier or convey customer, or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (Civ) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing immediate family of any such petition shareholder, officer, employee, supplier or to customer or any other director of Borrower. As used in this Section 4.1(cc)
(xvi) the appointment term "control" means the ownership of ten percent (10%) or more of the voting securities of a receiverPerson or the possession, rehabilitatordirectly or indirectly, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) power to direct or cause the limited liability company agreement direction of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors management and policies of a Borrower or Operating Lessee; providedPerson whether through ownership of voting securities, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent by contract or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee Member hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto hereof and until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debtfull:
(i) It has not owned and will not own any property or any other assets other than (A) with respect to the its membership interest in a Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation ownership of the Propertiessuch membership interest;
(ii) It was formed solely for the purpose of engaging in, and has not engaged and will not engage in, in any business other than the ownership, leasing, management, financing and operation ownership of the Propertiesa membership interest in a Borrower;
(iii) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases)Affiliates, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm's-length basis with third parties;
(iv) It has not incurred and will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than the Debt and the indebtedness described in clauses (iii) and (vi) of the definition of Permitted Indebtedness may be secured (subordinate or pari passu) by any personal property;
(v) Other than as provided in the Loan Documents, it It has not made and will not make any loans or advances to, and it will not pledge its assets for the benefit of, to any other Person (including any Affiliate or constituent party member or any Affiliate of any constituent partymember), and shall not acquire obligations or securities of any Affiliate or constituent party member or any Affiliate of any constituent partymember;
(vi) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(vii) It has done or caused to be done and will do all things necessary to observe corporate, partnership or limited liability company formalities (in all material respects)formalities, as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company operating agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity;
(viii) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);
(ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xi) To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part;
(xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Sources: Loan Agreement (Starwood Hotel & Resorts Worldwide Inc)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, as of the date hereof, at all times prior hereto hereof and until such time as the Debt Indebtedness shall be paid in full full, except as otherwise provided herein, in the other Loan Documents or its property in the Consulting Agreement, the Borrower, and if Borrower is no longer subject to a limited partnership, the Lien securing the Debtgeneral partner of Borrower:
(i) It has does not owned own and will shall not own any property or any other assets asset other than (A) with respect to the Property or, in the case of a general partner, its interest in Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) It was formed solely for the purpose of engaging in, and has is not engaged and will shall not engage in, in any business other than those necessary for the ownership, leasinguse, management, financing and management or operation of the Properties;
(iii) It has not Property and any transactions entered and will not enter into any contract or agreement in connection with such business with any Affiliate of its Affiliates (Borrower or the general partner, other than any such transactions embodied in the Loan Documents and the Operating Leases)Consulting Agreement, any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are shall be entered into upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm'sarms-length basis with third partiesparties other than an Affiliate of Borrower or such general partner;
(iviii) It will has not incur incurred, created or assumed any indebtednesscurrently outstanding debt, and shall not incur, create or assume any debt, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Indebtedness, trade indebtedness incurred in ordinary course of the Borrower's or the general partner's business (including the financing of insurance premiums) and the Permitted Indebtedness. Except Encumbrances, except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured otherwise expressly permitted hereunder;
(subordinate iv) has not made any currently outstanding, and shall not make any, loans or pari passu) by advances to any Property and no indebtedness other than the Debt and the indebtedness described in clauses third party (iii) and (vi) including any Affiliate of the definition of Permitted Indebtedness may be secured (subordinate Borrower or pari passu) by any personal propertysuch general partner);
(v) Other than as provided in the Loan Documents, it will not make any loans or advances to, and it will not pledge its assets for the benefit of, any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party), is and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vi) It is and will remain be solvent and it will pay paying its debts and liabilities (including employment including, as applicable, reasonable allocations of personnel and overhead expenses) from its assets as the same shall become due;
(viivi) It has done or caused to be done and will shall do or cause to be done all things necessary to observe limited liability company formalities (in all material respects), as the case may be, and preserve its existence, and it will shall not, nor will it permit or suffer shall any constituent party to general partner thereof, as applicable, amend, modify or otherwise change its partnership certificate, articles of incorporation or by-laws or partnership agreement, certificate as applicable without the prior written consent of formation Lender, in its sole discretion;
(except vii) shall observe all corporate or partnership formalities, as required by law)applicable, limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party conduct and operate its business as presently conducted and operated and in a manner which would adversely affect its existence as a Single Purpose Entityaccordance with the assumptions set forth in the Non-Consolidation Opinion;
(viii) It has and will shall maintain books and records, financial statements records and bank accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from or any other Person);
(ix) It has and will shall maintain a separate business office at the Property;
(x) shall be, and at all times has held and will shall hold itself out to the public as, a legal entity separate and distinct from any other entity (entity, including any of Affiliate thereof, provided that Borrower may identify its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared Property as associated with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliatethe applicable Franchisor;
(xxi) It has and will shall file its own tax returns, if required by the Code;
(xii) shall 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;
(xixiii) To shall not seek or consent to the fullest extent permitted by lawliquidation, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part, of Borrower or the general partner, nor enter into any consolidation, merger, joint venture, syndication or other combination;
(xiixiv) It does not and will shall not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability companyhas caused, either (a) and at all times shall cause, there to be at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each duly appointed member of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (an "Independent Director") of Borrower or the general partner who has not been at the time of such individual's appointment, and may not have been at any time during the preceding two years (A) a stockholder of, or an officer, director (other than with respect to such Independent Director's service as applicabledirector of Borrower or the general partner) or employee of, Borrower or any of its Affiliates, or the general partner or any of its Affiliates, (B) a customer or supplier to Borrower or any of its Affiliates, or to the general partner or any of its Affiliates, (C) a person or other entity controlling any such stockholder, supplier or customer, or (D) a member of the immediate family of any such stockholder, officer, employee, supplier or customer or any other director of Borrower or the general partner. As used in this subsection (dd), the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise;
(xvi) It has not caused, and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Membershall not cause, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted the general partner to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreementincorporation, by-laws or any voting trust agreement with respect to any Borrower's common stock, requires the unanimous affirmative vote of its one hundred percent (100%) of the members of the board of directors, unless at the time of such action there shall be at least two members of such board one member who are is an Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent DirectorsDirector;
(xvii) It has no liabilitiesshall comply with the provisions of its articles of incorporation or by-laws or partnership agreement, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;as applicable; and
(xviii) Each shall use separate and distinct invoices and stationery and checks that indicate, by printed or typed identification, that Borrower and Operating Lessee shall conduct its business so that is the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds entity for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee which payment is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Datemade.
Appears in 1 contract
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, shall not have or create any subsidiaries other than pursuant to a Permitted Reorganization. The General Partner shall not engage in any business or operate for any purpose other than as a general or limited partner of the date hereof, Borrower (provided that the General Partner may hold assets permitted by the proviso following clause (xiii) of the definition of "Single Purpose") and shall at all times prior hereto and until such time as be a Single Purpose entity; provided, however, that it is understood that, notwithstanding the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debt:
(i) It has not owned and will not own any property or any other assets other than (A) with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation provisions of the Properties;
clauses (ii) It was formed solely for the purpose of engaging in), and has not engaged and will not engage in, any business other than the ownership, leasing, management, financing and operation of the Properties;
(iii) It has not entered and will not enter into any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent parties or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are substantially similar to those that would be available on an arm's-length basis with third parties;
(iv) It will not incur any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Permitted Indebtedness. Except as set forth in the immediately preceding sentence, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property and no indebtedness other than the Debt and the indebtedness described in clauses (iiiv) and (vi) of the definition of "Single Purpose" contained herein (as such clauses relate to the period from the date of formation of the General Partner and the Borrower, as applicable, to the date hereof), (A) separate financial statements for the General Partner have not heretofore been produced on a regular basis, but the financial records of the General Partner have been and will remain adequate to permit production of such separate financial statements (including balance sheets and statements of income and changes in financial position) for past periods if it hereafter becomes necessary to produce such financial statements, and separate financial statements for the General Partner will hereafter be prepared on an annual basis; (B) because of the limited nature of the General Partner's operations it has not at all times heretofore maintained separate deposit accounts in its own name, but it has recently established and will maintain such accounts, consistent with the covenants contained in Section 5.10(i) hereof; (C) certain transaction and overhead costs incurred by the Borrower, the General Partner and/or Host Marriott may not heretofore have been allocated, but such costs hereafter will be fairly allocated; (D) except for (1) obligations of the Borrower for which it is liable in its capacity as General Partner and (2) any accrued obligations to Affiliates in connection with the allocation of costs for shared overhead and office expenses, the General Partner neither has nor expects to have any debt obligations, and (E) prior to 1989, the Borrower was not able to make all payments required under the Bank Debt as they became due, and the Borrower incurred approximately $13 million in liability to Host Marriott in connection with (or in lieu of) advances by Host Marriott under a guaranty of the Bank Debt, for which the Borrower remains liable and which constitutes Permitted Indebtedness may be secured Debt of the kind referred to in clause (subordinate iv) of the definition of that term herein. Neither Borrower nor the General Partner will: (i) seek or pari passuconsent to any dissolution, winding up, liquidation, consolidation, merger or sale of all or substantially all of its assets; (ii) fail to correct any known misunderstanding regarding its separate identity; (iii) commingle its funds or other assets with those of any other Person (except as specifically contemplated by the Cash Management Procedures); (iv) assume or guarantee or become obligated for the debts of any personal property;
other Person or hold out its credit as being available to satisfy the obligations of any other Person (other than as permitted by the Loan Documents); (v) Other than acquire obligations or securities of its partners or shareholders, as provided in the Loan Documents, it will not make case may be; (vi) pledge any loans or advances to, and it will not pledge of its assets for the benefit of, of any other Person other than the Lender (except for purchase money security interests or as otherwise permitted by the Loan Documents); (vii) make any loans to any other Person (including any Affiliate except advances of Permitted Debt by the General Partner or constituent party its Affiliates to the Borrower); (viii) identify its partners or any Affiliate of any constituent party), and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;
(vi) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(vii) It has done or caused to be done and will do all things necessary to observe limited liability company formalities (in all material respects)shareholders, as the case may be, and preserve or any of its existence, and Affiliates as a division or part of it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles for inclusion of incorporation the Borrower and bylaws, trust or other organizational documents or those of such constituent party the General Partner in a manner which would adversely affect its existence as a Single Purpose Entity;
(viii) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other PersonHost Marriott);
; (ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from engage (either as transferor or transferee) in any other entity (including any of its Affiliates, any of its constituent parties or material transaction with any Affiliate of other than for fair value and on terms similar to those obtainable in arms-length transactions with unaffiliated parties, or engage in any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared transaction with any AffiliateAffiliate involving any intent to hinder, including, but not limited to, paying for shared office space and services performed by delay or defraud any officer or employee of an Affiliate;
entity; (x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xi) To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part;
(xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business activity or operate for any purpose other than as stated in Section 2.03 of its Partnership Agreement and Article THIRD of the ownershipGP Certificate, maintenance as applicable, in each case as in effect on the date hereof or (xi) without the consent of all its directors or all the directors of its General Partner, as applicable, including the consent of an Independent Director, file a bankruptcy or insolvency petition or otherwise institute bankruptcy proceedings. Borrower will not acquire any assets not related to the business and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing DateHotels.
Appears in 1 contract
Sources: Loan Agreement (Courtyard by Marriott Limited Partnership)
Single Purpose. Each Borrower and Operating Lessee hereby represents and warrants to, and covenants with, Lender that, that as of the date hereof, at all times prior hereto hereof and until such time as the Debt shall be paid in full or its property is no longer subject to the Lien securing the Debtfull:
(ia) It has Borrower does not owned own and will not own any asset or property or any other assets other than (Ai) with respect to the Borrower, the Properties currently owned by itProperty, and (Bii) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to necessary for the ownership, leasing ownership or operation of the Properties;Property.
(iib) It was formed solely for the purpose of engaging in, and Borrower has not engaged and will not engage in, in any business other than the ownership, leasing, management, financing management and operation of the Properties;Property and Borrower has and will conduct and operate its business as presently conducted and operated.
(iiic) It Borrower has not entered and will not enter into any contract or agreement with any Affiliate of its Affiliates (other than the Loan Documents and the Operating Leases)Borrower, any constituent party of its constituent parties Borrower or any Affiliate of any constituent party, except contracts or agreements that are upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm'sarms-length basis with third parties;parties other than any such party.
(ivd) It Borrower has not incurred and will not incur any indebtednessIndebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) the Permitted Indebtedness. Except as set forth Debt, (B) trade and operational indebtedness incurred in the immediately preceding sentenceordinary course of business with trade creditors, no provided such indebtedness other 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 Debt may be secured date incurred and paid on or prior to such date, and/or (subordinate or pari passuC) by any Property and no indebtedness other than Permitted Equipment Leases; provided however, the Debt and aggregate amount of the indebtedness described in clauses ffil and .g shall not exceed at any time two percent (iii) and (vi2%) of the definition outstanding principal amount of Permitted Indebtedness may be secured (subordinate or pari passu) by any personal property;the Debt.
(ve) Other than as provided in the Loan Documents, it Borrower has not made and will not make any loans or advances to, and it will not pledge its assets for the benefit of, to any other Person third party (including any Affiliate or constituent party or any Affiliate of any constituent party), and has not and shall not acquire obligations or securities of any Affiliate or constituent party or any Affiliate of any constituent party;its Affiliates.
(vif) It Borrower has been, is and will remain solvent and it Borrower has paid and will pay its debts and liabilities (including employment including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due;; provided, that, in each such case, there exists sufficient cash flow from the Property to do so.
(viig) It Borrower has done or caused to be done and will do or cause to be done all things necessary to observe limited liability company organizational formalities (in all material respects), as the case may be, and preserve its existence, and it Borrower has not, will not, nor will it Borrower permit or suffer any constituent party to amend, modify or otherwise change its the partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or those of such constituent party without the prior consent of Lender in a manner which would adversely affect its existence as a Single Purpose Entity;
(viii) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);
(ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xi) To the fullest extent permitted by law, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution or winding up, in whole or in part;
(xii) It does not and will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xiii) It has 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 or any Affiliate of any constituent party or any other Person;
(xivi) Except in its capacity as a co-obligor under violates the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and single purpose covenants contained set forth in this Section 4.1(bb) with respect to the SPE Member3.1.24, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Sources: Loan Agreement (Hartman Short Term Income Properties XX, Inc.)
Single Purpose. Each Borrower and Operating Lessee ENTITY Seller hereby represents and warrants to, to Buyer and covenants with, Lender with Buyer that, on and as of the date hereof, of this Agreement and each Purchase Date and at all times prior hereto while this Agreement and until such time any Transaction hereunder is in effect or any Repurchase Obligations remain outstanding: (a) it is and intends to remain solvent, and it has paid and will pay its debts and liabilities from its own assets as the Debt same shall become due; LEGAL_US_E # 179498015.2179498015.6 52 (b) it has complied and will comply with the provisions of its certificate of formation and its limited liability company agreement; (c) it has done or caused to be paid in full or done and will do all things necessary to observe limited liability company formalities and to preserve its property is no longer subject existence; (d) it has maintained and will maintain all of its books, records and bank accounts separate from those of its affiliates, its members and any other Person, and it will file its own tax returns (except to the Lien securing extent consolidation is required or permitted under GAAP or as a matter of law); (e) it has been, is and will be, and at all times will hold itself out to the Debt:
public as, a legal entity separate and distinct from any other entity, it shall correct any known misunderstanding regarding its status as a separate entity, it shall conduct business in its own name, it shall not identify itself or any of its Affiliates as a division or part of the other; (if) It it has not owned and will not own any property or any other assets other than the Purchased Assets, cash and its interest under any associated Hedging Transactions; (Ag) with respect to the Borrower, the Properties currently owned by it, and (B) with respect to the Borrower and the Operating Lessee, incidental personal and intangible property relating to the ownership, leasing or operation of the Properties;
(ii) It was formed solely for the purpose of engaging in, and it has not engaged and will not engage in, in any business other than the origination, acquisition, ownership, leasing, management, financing and operation disposition of the Properties;
Purchased Assets and the associated Hedging Transactions in accordance with the applicable provisions of the Transaction Documents; (iiih) It it has not entered into, and will not enter into into, any contract or agreement with any of its Affiliates (other than the Loan Documents and the Operating Leases), any of its constituent parties or any Affiliate of any constituent partyaffiliates, except contracts or agreements that are upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm's-arm’s length basis with third parties;
Persons other than such affiliate; (ivi) It it has not incurred and will not incur any indebtednessindebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (A) obligations under the Permitted Indebtedness. Except as set forth Transaction Documents, (B) obligations under the documents evidencing the Purchased Assets, and (C) unsecured trade payables, in an aggregate amount not to exceed $200,000 at any one time outstanding, incurred in the immediately preceding sentenceordinary course of acquiring, no indebtedness other than the Debt may be secured (subordinate or pari passu) by any Property owning, financing and no indebtedness other than the Debt and the indebtedness described in clauses (iii) and (vi) disposing of the definition Purchased Assets; provided, however, that any such trade payables incurred by Seller shall be paid within sixty (60) days of Permitted Indebtedness may be secured the date incurred; (subordinate or pari passuj) by any personal property;
(v) Other than as provided in the Loan Documents, it has not made and will not make any loans or advances to, and it will not pledge its assets for the benefit of, to any other Person (including any Affiliate or constituent party or any Affiliate of any constituent party)Person, and shall not acquire obligations or securities of any Affiliate member or constituent party or any Affiliate affiliate of any constituent party;
(vi) It is and will remain solvent and it will pay its debts and liabilities (including employment and overhead expenses) from its assets as the same shall become due;
(vii) It has done member or caused to be done and will do all things necessary to observe limited liability company formalities (in all material respects), as the case may be, and preserve its existence, and it will not, nor will it permit or suffer any constituent party to amend, modify or otherwise change its partnership certificate, partnership agreement, certificate of formation (except as required by law), limited liability company agreement, articles of incorporation and bylaws, trust or other organizational documents or those of such constituent party in a manner which would adversely affect its existence as a Single Purpose Entity;
(viii) It has and will maintain books and records, financial statements and accounts separate and apart from those of any other Person and (other than in connection with the origination or acquisition of Purchased Assets); (k) it will file its own tax returns (except to the extent consolidation is required under GAAP, permitted for tax purposes or as a matter of law, provided that any consolidated financial statements contain a note indicating that it and its Affiliates are separate legal entities and maintain records, books of account and accounts separate and apart from any other Person);
(ix) It has and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any of its Affiliates, any of its constituent parties or any Affiliate of any constituent party), has and shall conduct business in its own name, has and shall exercise reasonable efforts to correct any known misunderstanding actually known to it regarding its separate identity, and has and shall maintain and utilize separate stationery, invoices and checks and it will reasonably allocate any overhead that is shared with any Affiliate, including, but not limited to, paying for shared office space and services performed by any officer or employee of an Affiliate;
(x) It has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xil) To it will not seek the fullest extent permitted by lawdissolution, neither it nor any constituent party has nor will seek any Borrower's or Operating Lessee's dissolution liquidation or winding up, in whole or in part;
part of Seller; (xiim) It does not and it will not commingle its funds and other assets with those of any Affiliate or constituent party or any Affiliate of any constituent party its Affiliates or any other Person except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
Person; (xiiin) It it 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 or any Affiliate of any constituent party its Affiliates or any other Person;
(xiv) Except in its capacity as a co-obligor under the Notes together with the other Borrowers, if applicable, it does not and will not hold itself or its credit out to be responsible for or available to satisfy, and it has not guaranteed or otherwise become liable for, and has not and will not guarantee or otherwise become liable for, the debts, securities or obligations of any other Person;
(xv) If it is a limited liability company, either (a) at least one of its members is and shall be a Single Purpose Entity (the "SPE Member") whose sole assets are its interest in the applicable Borrower or Operating Lessee and that has no less than a one percent (1%) membership interest in the applicable Borrower or Operating Lessee, and such Borrower or Operating Lessee shall be deemed hereby to have made each of the representations, warranties and covenants contained in this Section 4.1(bb) with respect to the SPE Member, and the SPE Member shall have two (2) Independent Directors as duly appointed members of its board of directors or (b) it shall have two (2) Independent Directors on its board of managers or board of directors (as applicable);
(xvi) It has and shall, at all times, have a limited liability company agreement which provides that, for so long as the Loan is outstanding and the applicable Borrower's Property remains subject to the Lien securing the Debt, its board of directors (or (a) if such Borrower or Operating Lessee is a limited liability company with a managing member SPE Member, the board of directors of the SPE Member or (b) if such Borrower or Operating Lessee is a board managed limited liability company with two (2) Independent Directors on its board of directors) will not be permitted to take any action which, under applicable law or the terms of any certificate of incorporation or certificate of formation, limited liability company agreement, by-laws or any voting trust agreement with respect to any common stock, requires the vote of its board of directors, unless at the time of such action there shall be at least two members of such board who are Independent Directors; provided, however, that, subject to any applicable Legal Requirement, its board of directors (or if such Borrower or Operating Lessee is a limited liability company and is not self managed, the board of directors of its SPE Member) may, at its discretion, be permitted to take any action without regard to the preceding clause of this sentence other than the following actions, which actions may not be taken: (A) to the fullest extent permitted by law, dissolve or liquidate, in whole or in part; (B) consolidate or merge with or into any other entity or convey or transfer all or substantially all of its properties and assets to any entity unless the applicable Borrower is releasing that Property from the Lien of the Mortgage or paying off the Loan in accordance with the terms herein; (C) engage in any business other than the ownership, maintenance and operation of the Properties or, with respect to the SPE Member (if applicable), acting as a member of a Borrower or Operating Lessee; (D) institute any proceeding to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Bankruptcy Code or consent to the filing of any such petition or to the appointment of a receiver, rehabilitator, conservator, liquidator, assignee, trustee, custodian or sequestrator (or other similar official) of its SPE Member or any Borrower or Operating Lessee or of any substantial part of their property, or ordering the winding up or liquidation of its affairs, or make or consent to an assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing; (E) except as required by law, amend its SPE Member's certificate of incorporation (if applicable) or the limited liability company agreement of the applicable Borrower or Operating Lessee, but only to the extent such amendment impacts the Company's status as a Single Purpose Entity; (F) enter into any transaction with an Affiliate not in the ordinary course of the applicable Borrower's or Operating Lessee's business; or (G) withdraw the SPE Member, if applicable, or remove the two (2) Independent Directors of a Borrower or Operating Lessee; provided, however, clause (D) above may be taken with the affirmative consent of the two (2) Independent Directors;
(xvii) It has no liabilities, contingent or otherwise, other than those normal and incidental to the ownership, operation and leasing of the Properties;
(xviii) Each Borrower and Operating Lessee shall conduct its business so that the assumptions made with respect to such Borrower or Operating Lessee in that certain opinion letter dated the date hereof delivered by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP addressing substantive non-consolidation and other matters in connection with the Loan shall at all times be true and correct in all respects;
(xix) No Borrower or Operating Lessee will permit any Affiliate or constituent party independent access to its bank accounts except that each Borrower and Operating Lessee may commingle its funds with the funds of the other Borrowers and Operating Lessees in the Deposit Account, in the Holding Account, in the Tax and Insurance Escrow Account and in each of the other Reserve Accounts;
(xx) Each Borrower and Operating Lessee has and shall pay the salaries of its own employees, if any, and maintain a sufficient number of employees in light of its contemplated business operations;
(xxi) Each Borrower and Operating Lessee has and shall compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. Upon the withdrawal or the disassociation of the Independent Director from any constituent entity of any Borrower or Operating Lessee (or from a Borrower or Operating Lessee directly), such Borrower or Operating Lessee shall immediately appoint a new director or special member or cause such entity to appoint a new director or special member that satisfies the requirements of an Independent Director under this Agreement; and
(xxii) Each Borrower and Operating Lessee is subject to and complies with all of the limitations on powers and separateness requirements set forth in its organizational documentation as of the Closing Date.
Appears in 1 contract
Sources: Master Repurchase and Securities Contract Agreement (Granite Point Mortgage Trust Inc.)