Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not: (i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto; (ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date; (iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities; (v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent; (vi) commingle its assets with the assets of any of its Affiliates, or of any other Person; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower; (xi) seek its dissolution or winding up in whole or in part; (xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person; (xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates); (xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; (xvi) 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, or make an assignment for the benefit of creditors; (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person; (xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet; (xix) fail to pay its own liabilities and expenses only out of its own funds; (xx) fail to pay the salaries of its own employees, if any; (xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members; (xxii) guarantee any obligation of any Person, including an Affiliate; (xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate; (xxiv) fail to use separate invoices and checks bearing its own name; (xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person; (xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year; (xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause; (xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or (xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 5 contracts
Sources: Loan and Security Agreement (Oaktree Specialty Lending Corp), Loan and Security Agreement (Oaktree Specialty Lending Corp), Loan and Security Agreement (Oaktree Specialty Lending Corp)
Special Purpose Entity. At all times prior to Except as contemplated by the Collection DateFacility Documents, the Borrower has not Seller shall, and shall not:
cause the REO Subsidiary to (i) own no assets, and not engage in any business, other than the assets and transactions specifically contemplated by the Facility Documents; (ii) maintain books and records separate from those of all other Persons; (iii) maintain its bank accounts separate from each other Persons; (iv) not commingle its assets with those of any other Person; (v) pay its own debts and liabilities out of its own funds; (vi) maintain financial statements separate and apart from those of all other Persons; (vii) observe all organizational formalities and other applicable or customary formalities to preserve its existence; (viii) not engage in any business or activity other than as set forth in Seller’s organizational documents or the purchaseREO Subsidiary Agreement, receipt, management as applicable; (ix) not guarantee or become obligated for the debts of any other Person or make any loans or advances to any other Person and sale shall not acquire obligations or securities of Collateral, the transfer and pledge of Collateral pursuant to the terms Seller’s or Guarantor’s Affiliates other than Seller’s ownership of the Transaction DocumentsREO Subsidiary Interests and Participation Interests; (x) not acquire the direct or indirect obligations of, the entry into or securities issued by, its shareholders or any Affiliate; (xi) allocate fairly and the performance under the Transaction Documents and such other activities as reasonably any overhead for expenses that are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary shared with an Affiliate, including paying for the operation office space and services performed by any employee of the Borrower and the performance any Affiliate; (xii) conduct business in its own name, promptly correct any known misunderstandings regarding its separate identity, hold all of its obligations under the Transaction Documents includingassets in its own name, without limitationand not identify itself as a division of any other Person; (xiii) reserved; (xiv) not engage or suffer any change in ownership, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolvewinding-up, terminate dissolve or liquidate in whole or in part except as otherwise provided in Seller’s organizational documents or the REO Subsidiary Agreement, as applicable; (xv) not consolidate or merge, in whole or in part, transfer with or into any other entity or sell, lease, assign, convey or otherwise dispose of transfer all or substantially all of its properties and assets to any Person; (other than in accordance with xvi) not take any action that knowingly shall cause the provisions hereof)Seller or the REO Subsidiary to become insolvent; (xvii) use separate stationery, without in each case first obtaining invoices, and checks bearing its own name; (xviii) not incur or assume any Indebtedness; (xix) not hold out its credit as being available to satisfy the prior written consent obligations of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
others; (ivxx) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or not make any Investment in loans or advances to any Person (other than Permitted Investments third party, and shall not acquire obligations or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any securities of its Affiliates, or of any other Person;
; (viixxi) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xvixxii) file or consent to the filing separate tax returns from those of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) each Person and entity except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with have an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
Independent Member; (xxiv) fail to use separate invoices except as contemplated by this Agreement and checks bearing its the other Facility Documents not form, acquire or hold any Subsidiary or own name;
any equity interest in any other entity other than the REO Subsidiary Interests and the Participation Interests; and (xxv) except for any Permitted Lien relating to any Equity Security, pledge maintain its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case a manner that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer be costly or employee of the Borrower difficult to segregate ascertain or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate identify from those of any other Person. Seller and REO Subsidiary shall not permit any modification or restructuring of Seller’s organizational documents or the REO Subsidiary Agreement (including, except without limitation, any changes in the cash flow with respect to the extent that Seller’s organizational documents and the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawREO Subsidiary Agreement) without the consent of the Buyer.
Appears in 4 contracts
Sources: Master Repurchase Agreement (Rocket Companies, Inc.), Master Repurchase Agreement (Rocket Companies, Inc.), Master Repurchase Agreement (Rocket Companies, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents ownership of Capital Stock of any REO Asset Owner and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement, (b) the Capital Stock of any REO Asset Owner and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date), terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiaryexcept for a Subsidiary REO Asset Owner, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) except for the Capital Contribution Agreement, enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the BorrowerSeller, CS Funding VII, the Seller Originator and CapitalSource Finance LLC or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own fundsfunds or out of funds received by it in connection with its ownership of Capital Stock in any REO Asset Owner;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders (other than any REO Asset Owner);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes Third Amendment and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawRestatement Effective Date.
Appears in 4 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to the Collection Date, the Each of Borrower has not and shall notGeneral Partner shall:
(i) engage in any business or activity other than the purchase, receipt, management maintain its own separate books and sale of Collateral, the transfer records and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretobank accounts;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of at all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to times conduct its business, including all oral and written communications business solely in its own name in order a manner not (a) misleading to mislead others other Persons as to the its identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any through the use of its principals or Affiliatesseparate stationary, signage and business cards);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xviiii) file or consent to the filing of any petitionits own tax returns, either voluntary or involuntaryif any, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other under applicable state or local tax law, hold itself out as to the extent (1) not part of a consolidated group filing a consolidated return or be considered returns or (2) not treated as a department or division for tax purposes of (a) another taxpayer, and pay any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Persontaxes so required to be paid under applicable law;
(xviiiiv) fail hold all of its assets in its own name and not commingle its assets with assets of any other Persons;
(v) strictly comply with all organizational formalities to maintain its separate existence;
(vi) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person Person, and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s its assets may be included in a consolidated financial statement statements of an Affiliate one of its Affiliates, and provided further that for financial statements covering fiscal quarters ending on and after the Borrower or first fiscal quarter ending after the Collateral Manager Closing Date (or parent company) provided that (a1) appropriate notation disclosure within the consolidated financial statements or footnotes thereto shall be made on such consolidated financial statements to indicate the its separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s its assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b2) such assets shall also be listed on the Borrower’s its own separate balance sheet;
(xixvii) fail to pay its own liabilities and expenses only out of its own funds;
(xxviii) fail maintain an arm’s-length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis and on terms similar to pay the salaries those of its own employees, if anyan arm’s-length transaction (it being understood that it may enter into any contract or any other Affiliate transaction expressly permitted under this Agreement);
(xxiix) except in connection with correct any exchange offer, work-out, restructuring or the exercise known misunderstanding regarding its separate identity and not identify itself as a division of any rights or remedies other Person;
(x) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided that the foregoing shall not require any parent thereof to make any additional capital contributions to it;
(xi) cause its partners, officers, agents and other representatives (including any director and/or officer on behalf of General Partner) to act at all times with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire it consistently and in furtherance of the obligations or securities issued by foregoing and in its Affiliates or membersbest interests;
(xxiixii) guarantee any obligation maintain its funds and 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 other Person, including an Affiliate;
(xxiiixiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any an employee of an Affiliate;; and
(xxivxiv) fail to use separate invoices and checks bearing not amend, alter or change the terms of its own name;
(xxv) except for exempted limited partnership agreement or LLC agreement, as the case may be, in any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director material respect unless Administrative Agent consents thereto (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, foregoing provisions in each case that is not an Affiliate of the Borrowerthis clause (j), the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors“Required SPV Provisions”); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 4 contracts
Sources: Loan Agreement (Asac Ii Lp), Loan Agreement (Asac Ii Lp), Loan Agreement (Asac Ii Lp)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent manager or director member (the “Independent ManagerSpecial Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (av) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager respective equityholders or Affiliates (other than as an Independent Manager a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (av), (bx) or (cy) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (av) by reason of being the Independent Manager Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent ManagerSpecial Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law.
Appears in 4 contracts
Sources: Loan, Security and Collateral Management Agreement (Investcorp Credit Management BDC, Inc.), Loan, Security and Investment Management Agreement (Investcorp US Institutional Private Credit Fund), Loan, Security and Investment Management Agreement (Investcorp US Institutional Private Credit Fund)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Restatement Date, upon which the conclusions expressed therein are based.
Appears in 3 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.), Credit Agreement
Special Purpose Entity. At all times prior Unless otherwise consented to the Collection Dateby Lender in writing, the each Borrower has not and Party shall not:
be a Special Purpose Entity that shall (i) own no assets, and will not engage in any lines of business or activity activities, other than the purchase, receipt, management assets and sale of Collateral, transactions specifically contemplated by the transfer and pledge of Collateral pursuant to the terms of the Transaction Facility Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) not incur any IndebtednessIndebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than Indebtedness pursuant to the Secured Parties hereunder Facility Documents; (iii) not make any loans or in conjunction with a repayment advances to any Affiliate or third party, and not acquire obligations or securities of all Advances owed to any Borrower’s Affiliates (other than the Lenders assets and a termination of all transactions specifically contemplated by the Commitments;
Facility Documents); (viiiiv) become insolvent or fail to pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its assets own assets; (v) comply with the provisions of its organizational documents; (vi) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents (except, with respect to the Certificate of Formation, as required by law), or suffer the same to be amended, modified or otherwise changed, without the Lender’s prior written consent which shall become due;
not be unreasonably conditioned, withheld or delayed; (ixvii) fail to maintain all of its recordsbooks, books of account records and bank accounts financial statements separate and apart from those of any other Person;
its Affiliates (x) enter into any contract except that such financial statements may be consolidated with an Affiliate to the extent consolidation is required under GAAP or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Personas a matter of applicable law); provided that, for to the avoidance extent required by GAAP, the financial statements shall disclose the separateness of doubt with regard to this clause (x), (i) acquisitions of Collateral each Borrower from the Sellersuch Affiliate, and sales indicate that each Borrower’s assets and credit are not available to satisfy the debts and other obligations of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller such Affiliate or any other Person;
; (xiiiviii) guaranteebe, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to and at all times shall hold itself out to the public as as, a legal entity separate and distinct from any other Person or to entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct its business, including all oral and written communications solely business in its own name in order name, shall not (a) to mislead others as to the identity of the Person with which such other party is transacting business, identify itself or (b) to suggest that it is responsible for the debts of any third party (including any of its principals Affiliates as a division or Affiliates);
part of the other; (xvix) fail not enter into any transaction, including the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any other Borrower or any Affiliate, unless such transaction is (A) not otherwise prohibited in this Agreement, (B) in the ordinary course of such Borrower’s business, and (C) upon fair and reasonable terms no less favorable to such Borrower, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate; (x) 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;
purposes, transactions and liabilities; (xvixi) file or consent to the filing fullest extent permitted by law, not engage in or suffer any dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein); (xii) not commingle its funds or other assets with those of any petition, either voluntary Affiliate or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and shall maintain its properties and assets in such manner that it would not have be costly or difficult to identify, segregate or ascertain its properties and assets listed on any financial statement from those of others; (xiii) except as permitted by the Facility Documents, will not hold itself out to be responsible for the debts or obligations of any other Person; provided(xiv) not form, however, that the Borrower’s assets may be included acquire or hold any Subsidiary or own any equity interest in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and entity; (bxv) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate stationery, invoices and checks bearing its own name;
; (xxvxvi) allocate fairly and reasonably any overhead for shared office space and services performed by an employee of an Affiliate; and (xvii) except for any Permitted Lien relating to any Equity Securityas permitted by the Facility Documents, not pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 3 contracts
Sources: Loan and Security Agreement (Front Yard Residential Corp), Loan and Security Agreement (Altisource Residential Corp), Loan and Security Agreement (Altisource Residential Corp)
Special Purpose Entity. At all times prior to the Collection Date, The Borrower shall not (nor has the Borrower has not and shall not:taken any such action in the past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets from the Seller under the Purchase Agreement, the transfer and pledge of Receivables and other Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets from the Seller under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreementFormation Documents or other governing documents, as applicable, or fail to observe limited liability company corporate formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duenot Solvent;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(x) enter into any contract or agreement with any of its Principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided thatparties, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and not including its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the BorrowerBorrower or UACC, the Seller as applicable, or any Principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person, except as expressly provided in the Basic Documents;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party Person is transacting business, or (bB) to suggest that it is responsible for the debts Indebtedness of any third party other Person (including any of its principals Principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals Principals or Affiliates, (bB) any Affiliate of a principal Principal or (cC) any other Person;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that a direct or indirect ownership interest in the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of , unless the Borrower or delivers to the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetSecured Parties an acceptable non-consolidation opinion;
(xixxx) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of Obligations hereunder;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviixxv) fail to ensure include provisions in the Trust Agreement that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including require the consent of the Borrower’s Independent Manager) Owner Trustee is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state State law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing;
(xxvi) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents;
(xxvii) not take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of [***], dated the Closing Date;
(xxviii) elect or otherwise permit the Borrower to be treated as an entity taxable as a corporation for U.S. federal income Tax purposes; orand
(xxix) fail to file maintain separate financial statements, showing its own Tax returns assets and liabilities separate and apart from those of any other Person, except to or have its assets listed on the extent financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliates in accordance with GAAP, if (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower is treated as a “disregarded entity” for Tax purposes from such Affiliates and is to indicate that the Borrower’s assets and credit are not required available to file Tax returns under Applicable Law, satisfy the Indebtedness and pay obligations of such Affiliates or any Taxes required to other Person and (b) such assets shall also be paid under Applicable Lawlisted on the Borrower’s own separate balance sheet.
Appears in 3 contracts
Sources: Warehouse Agreement (Vroom, Inc.), Warehouse Agreement (Vroom, Inc.), Warehouse Agreement (Vroom, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate Equityholder so long as the separateness of the Borrower from such Person the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or the Equityholder or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller Equityholder or an Affiliate), or (ii) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer transfer, divide or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)) or change its jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative AgentAgent and each Lender, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its limited liability company agreement, operating agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iic) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller BDC or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate BDC so long as the separateness of the Borrower from such Person the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the BDC are disclosed by the BDC within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller BDC or an Affiliate), or (ii) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Loan and Security Agreement (New Mountain Finance Corp), Loan and Security Agreement (New Mountain Finance Corp), Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:not (other than in connection with the transactions contemplated by the CSIII Sale Agreement and the QRS Sale Agreement, as applicable):
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the applicable Originator under the applicable Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and execution of the performance under the Transaction Documents Sellers Guaranty and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the applicable Originator under the applicable Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity Subsidiary (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary that solely owns and operates REO Assets) or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligationobligation (other than with respect to the Sellers Guaranty)), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances the Advance owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided, that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any PersonPerson (other than with respect to the Sellers Guaranty), except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Seller and the Seller applicable Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (other than with respect to the Sellers Guaranty);
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates (other than an Affiliate that solely owns and operates REO Assets) or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own namebank accounts;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the an “Independent ManagerDirector”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer; provided, however, such Independent Manager Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide ensure that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required received for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 3 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) Reserved;
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend 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;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. At all times prior Unless otherwise consented to by Administrative Agent in writing, and except as expressly permitted by the Collection DateFacility Documents, Borrower and Pledgor shall comply with the Borrower has not and Facility Documents, shall not:
be Special Purpose Entities that shall (i) own no assets, and will not engage in any lines of business or activity activities, other than the purchase, receipt, management assets and sale of Collateral, transactions specifically contemplated by the transfer and pledge of Collateral pursuant to the terms of the Transaction Facility Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) not incur any IndebtednessIndebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than Indebtedness permitted under the Facility Documents; (iii) not make any loans or advances to any Affiliate or third party, and shall not acquire obligations or securities of Borrower’s Affiliates; (iv) to the Secured Parties hereunder or in conjunction with a repayment extent of all Advances owed to available cash flow from the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to Financed SF Properties pay its debts and liabilities (including, as applicable, shared personnel expenses and overhead expenses) only from its assets own assets; (v) comply with the provisions of its organizational documents (except, with respect to the certificate of formation, as required by law); (vi) do all things necessary to observe organizational formalities and to preserve its existence, and not amend, modify or otherwise change its organizational documents, or suffer the same shall become due;
to be amended, modified or otherwise changed, to be inconsistent with this Section 12(r) without Administrative Agent’s prior written consent (ixother than its certificate of formation, to the extent such amendment or modification is required by any Requirement of Law); (vii) fail to maintain all of its recordsbooks, books of account records and bank accounts financial statements separate and apart from those of any other Person;
its Affiliates (x) enter into any contract or agreement except that such financial statements may be consolidated with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral Affiliate to the Seller and its Affiliatesextent consolidation is required under GAAP or as a matter of any Requirement of Law; provided, each in accordance with other provisions of this Agreement that to the extent required by GAAP (including, without limitation, Section 6.2(m), Section 6.2(n1) and Section 6.2(o)) and the other Transaction Documents appropriate notation shall be permitted made on such financial statements if prepared to indicate the separateness of Borrower Party from such Affiliate and (ii) to indicate that Borrower Party’s assets and credit are not available to satisfy the Equityholder may contribute cash or debts and other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities obligations of the Borrower, the Seller such Affiliate or any other Person;
Person and (xiii2) guaranteesuch assets shall also be listed on Borrower Party’s own separate balance sheet, become obligated forif prepared and (3) Borrower Party shall file its own tax returns if filed, except to the extent consolidation is required or hold itself out to be responsible for the debt permitted under any Requirement of another Person;
Law); (xivviii) fail either to be, and at all times will hold itself out to the public as as, a legal entity separate and distinct from any other Person or to entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct its business, including all oral and written communications solely business in its own name in order name, shall not (a) to mislead others as to the identity of the Person with which such other party is transacting business, identify itself or (b) to suggest that it is responsible for the debts of any third party (including any of its principals Affiliates as a division or part of the other; (ix) not enter into any transactions with any Affiliates);
, other than for the Asset Management Agreements and other transactions permitted or required by the Facility Documents, except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s length transaction; (xvx) fail intend 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;
(xvi) file or consent to the filing of any petitionpurposes, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code transactions and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Personliabilities; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate foregoing shall not require the direct or indirect partners or members of the Pledgor and any Borrower to make additional capital contributions or loans to any such Person; (xi) to the Collateral Manager fullest extent permitted by law, not engage in or suffer any Change in Control, other than the Supernova SPAC Transaction consummated by the Guarantor, dissolution, winding up, liquidation, consolidation or merger or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein); (xii) not, other than as contemplated in the Facility Documents, commingle its funds or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness other assets with those of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person any Affiliate or any other Person and shall maintain its properties and assets in such manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others; (bxiii) such assets shall also be listed on not institute against, or join any other Person in instituting against any Borrower Party, any proceedings of the Borrower’s own separate balance sheet;
(xix) fail type referred to pay its own liabilities and expenses only out in the definition of its own funds;
(xx) fail “Insolvency Event” hereunder or seek to pay the salaries of its own employees, if any;
(xxi) except substantively consolidate Borrower Party in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies Insolvency Event with respect to any Loan with respect Borrower-Related Party or any other Person; (xiv) will not hold itself out to which an Obligor is be responsible for the debts or would thereby become an Affiliateobligations of any other Person; (xv) not form, acquire the obligations or securities issued by its Affiliates or members;
hold any equity interest in any other entity; (xxiixvi) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are for shared with an Affiliate, including paying for office space and services performed by any an employee of an Affiliate;
; (xxivxvii) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, not pledge its assets to secure the obligations of any other Person;
Person other than pledges specifically contemplated by the Facility Documents; (xxvixviii) fail not, without the prior unanimous written consent of all of its members and each Independent Manager, take any Insolvency Action; (xix)(a) have at any time to have all times at least one Independent Manager and (1b) independent manager or director (provide Administrative Agent with up-to-date contact information for each such Independent Manager and a copy of the agreement pursuant to which such Independent Manager consents to and serves as an “Independent Manager”” for each Borrower Party; and (xx) who has prior experience as an independent director, independent manager or independent member with the organizational documents for each Borrower shall provide (a) that Administrative Agent be given at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate two (2) Business Days prior written notice of the Borrowerremoval and/or replacement of any Independent Manager, together with the Seller or name and contact information of the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an replacement Independent Manager and is not, and has never been, and will not while serving as evidence of the replacement’s satisfaction of the definition of Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or that any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified not have any fiduciary duty to serve as an Independent Manager anyone including the holders of the Borrowerequity interest in a Borrower and any Affiliates of a Borrower Party except any Borrower Party and the creditors of a Borrower Party with respect to taking of, provided or otherwise voting on, the Insolvency Action; provided, that the fees foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. Borrower Representative shall not perform its duties under this Agreement in a manner that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute would result in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail Borrowers’ failure to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawcomply with this Section 12(r).
Appears in 2 contracts
Sources: Loan and Security Agreement (Offerpad Solutions Inc.), Loan and Security Agreement (Offerpad Solutions Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) i. engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) . acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) . merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), . fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) v. form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) . commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 2 contracts
Sources: Loan, Security and Collateral Management Agreement (AG Twin Brook Capital Income Fund), Loan, Security and Collateral Management Agreement (AGTB Private BDC)
Special Purpose Entity. At Each of the Issuer and the Transferor, at all times prior to the Collection Date, the Borrower has not and shall nottimes:
(i) shall do all things necessary to observe corporate formalities, and preserve its existence as a single-purpose, bankruptcy-remote entity;
(ii) shall allocate fairly and reasonably and pay from its own funds the cost of (i) any overhead expenses (including paying for any office space) shared with any of its Affiliates and (ii) any services (such as asset management, legal and accounting) that are provided jointly to it and one or more of its Affiliates;
(iii) shall maintain and utilize separate invoices and checks bearing its own name;
(iv) shall be, and at all times hold itself out to the public as, a legal entity separate and distinct (other than for tax purposes) from any other Person;
(v) shall comply with any other customary rating agency requirements for a single purpose entity as the Agent may require from time to time by notice to the Issuer and the Transferor;
(vi) shall conduct its business and activities in all respects in compliance with the assumptions contained in the legal opinion delivered pursuant to Section 3.1(a)(viii)(I) of this Agreement;
(vii) shall not engage in any business or activity other than the purchaseownership, receipt, management operation and sale maintenance of Collateralthe Receivables, the transfer and pledge of Collateral pursuant to the terms issuance of the Transaction Documents, the entry into Notes and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iiviii) shall not acquire or own any material assets other than (a) the Collateral or (b) Receivables, and such incidental personal property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderReceivables;
(iiiix) shall not merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(ivx) except as otherwise permitted under clause (iii), shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, and qualifications to do business, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company partnership agreement, certificate of limited partnership, bylaws, articles of incorporation, operating agreement, articles of organization, certificate of trust, trust agreement or fail to observe limited liability company formalitiesother similar organizational documents, as the case may be;
(vxi) form, acquire or shall not own any Subsidiary, own Subsidiary (except for the Issuer) or make any Capital Stock equity investment in any other entity Person without the consent of the Agent;
(other than Capital Stock in Obligors xii) except in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent servicing of the Administrative Agent;
(vi) Receivables, shall not commingle its assets with the assets of any of its members, general partners, shareholders, Affiliates, principals or of any other Person;
(viixiii) shall not incur any IndebtednessIndebtedness for borrowed money, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsObligations;
(viiixiv) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) not fail to maintain its records, books of account accounts and bank accounts separate and apart from those of its members, partners, shareholders, principals and Affiliates or any other Person;
(xxv) shall not, other than its formation documents or any Transaction Documents or as otherwise provided in the Transaction Documents, enter into any contract or agreement with any Personof its members, general partners, shareholders, principals or Affiliates, or any member, general partner, shareholder, principal or Affiliate of any of the foregoing, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided thatany of its members, for the avoidance of doubt with regard to this clause (x)general partners, (i) acquisitions of Collateral from the Sellershareholders, and sales of Collateral to the Seller and its principals or Affiliates, each in accordance with other provisions or any member, general partner, shareholder or Affiliate of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and any of the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrowerforegoing;
(xixvi) shall not seek its dissolution or winding up in whole whole, or in part;
(xiixvii) shall not fail to correct any known misunderstandings regarding the its separate identities of the Borrower, the Seller or any other Personidentity;
(xiiixviii) guaranteeother than as provided in the Transaction Documents, become obligated for, or shall not hold itself out to be responsible for the debt Indebtedness or liabilities of another Person;
(xivxix) fail either to hold itself out shall not, other than owning the Receivables purchased from the Seller pursuant to the public as a legal entity separate Receivables Purchase Agreement, solely in the case of the Transferor, and distinct owning the Receivables purchased from the Transferor pursuant to the Transfer and Servicing Agreement, solely in the case of the Issuer, make any other Person loans or advances to conduct its businessany third party, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity any member, general partner, shareholder, principal or Affiliate of the Person with which such other party is transacting businessIssuer, the Seller, the Servicer, the Transferor or (b) to suggest that it is responsible for the debts any member, general partner, shareholder, principal or Affiliate of any third party (including any of its principals or Affiliates)the foregoing;
(xvxx) shall not fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;operations (provided that this clause shall not require any owner of the Transferor or the Issuer to make any contribution of capital to the Transferor or the Issuer); and
(xvixxi) file or consent to the filing shall not, except for invoicing for collections and servicing of Receivables, share any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
common logo with (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals general partners, shareholders, principals, members or Affiliates, (bii) any Affiliate of a principal any of its general partners, shareholders, principals or members, or (ciii) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 2 contracts
Sources: Purchase Agreement (Atlanticus Holdings Corp), Purchase Agreement (Atlanticus Holdings Corp)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate Equityholder so long as the separateness of the Borrower from such Person the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or the Equityholder or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller Equityholder or an Affiliate), or (ii) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.), Loan and Security Agreement (New Mountain Guardian III BDC, L.L.C.)
Special Purpose Entity. At The Borrower acknowledges that the Administrative Agent and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon the Borrower's identity as a legal entity that is separate from the Originator. Therefore, from and after the date of execution and delivery of this Agreement, the Borrower shall take all times prior reasonable steps to maintain the Borrower's separate legal identity and to make it manifest to third parties that the Borrower is an entity with assets and liabilities distinct from those of the Originator and not just a division of the Originator. Without limiting the generality of the foregoing and in addition to the Collection Dateother covenants set forth herein, the Borrower will not hold itself out to third parties as liable for the debts of the Originator. In addition, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralCollateral and related assets, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, ) or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, without in connection with any each case first obtaining the consent of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateAdministrative Agent and each Lender;
(iv) control the decision or actions respecting the daily business or affairs of any other Person except as otherwise permitted under clause this Agreement;
(iii), v) fail to preserve its existence as an entity duly organizedformed, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent and each Lender, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementorganizational documents, or fail to observe limited liability company partnership formalities;
(vvi) formoperate, acquire or own any Subsidiarypurport to operate, own any Capital Stock in any other collectively as a single or consolidated business entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerother Person (except as may be required for U.S. federal income tax purposes and except for accounting purposes, work-out or restructuring of a Loanit may be consolidated with other Persons (including the Originator) as permitted by GAAP), ;
(vii) own any Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative AgentAgent and each Lender;
(viviii) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viiix) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsLenders;
(viiix) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixxi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xxii) enter into any contract or agreement with any Person, except (a) the Transaction Documents and the Master Participation Agreement and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xixiii) seek its dissolution or winding up in whole or in part;
(xiixiv) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower and any Affiliate or any principal thereof or any other Person;
(xiiixv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name (other than for U.S. income tax purposes) in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, except to the extent that the Borrower’s assets may be included 's financial and operating results are consolidated with those of the Originator in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders, other than with respect to any Eligible Loan whose Obligor is an Affiliate of the Collateral Manager or the Originator so long as such Eligible Loan shall have been acquired from a Person who is not Affiliated with the Collateral Manager or the Originator;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate invoices and checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person;
(xxvi) fail at any time , other than with respect to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate payment of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) indebtedness to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business)Secured Parties hereunder; (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;and
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s maintain at least one Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 2 contracts
Sources: Loan and Servicing Agreement (Franklin BSP Lending Corp), Loan and Servicing Agreement (Business Development Corp of America)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend 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;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralCollateral and related assets, the transfer and pledge Grant of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderCollateral;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of Sections 1.05, 1.07, 1.08, 4.02(b) and 10.01 of its limited liability company agreementoperating agreement and any of the defined terms in Section 1.01 of its operating agreement that are contained in any of the above-mentioned sections thereof, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) an REO Affiliate without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Intercreditor Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Lender, except for trade payables in the ordinary course of its business; provided, that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any PersonAffiliate, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with unrelated third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrowerparties;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Borrower and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than the Loans, Cash and Permitted Investments);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations (without limiting the foregoing, it is acknowledged and agreed that a single member limited liability company is a disregarded entity for purposes of the Internal Revenue Code);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct ownership interest in the Borrower to the extent it has the ability to control the same, other than a pledge of the membership interests in the Borrower to secure the Fortress Notes, unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided(without limiting the foregoing, howeverit is acknowledged that for accounting purposes, that the Borrower’s assets Company may be consolidated with another Person as required by GAAP and included in a such Person’s consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements);
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxiixxv) guarantee any obligation of any Person, including an AffiliateAffiliate (other than any REO Subsidiary);
(xxiiixxvi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvii) fail to use separate invoices and checks bearing its own name;
(xxvxxviii) except for any Permitted Lien relating to any Equity Security, pledge or permit the pledge of its assets to secure for the obligations benefit of any other Person, other than with respect to the payment of the indebtedness to the Secured Parties hereunder;
(xxvixxix) fail at any time to have at least one (1) independent manager or director (the an “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) currently a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, trade creditor, supplier shareholder, manager or service provider; member (or (dspouse, parent, sibling or child of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Originator, (b) or the Borrower, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Originator, (ad) by reason any Affiliate of being the Originator, or (e) any Affiliate of any principal of the Originator; provided, however, such Independent Manager may be an independent manager or an independent manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;Originator; and
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxx) fail to provide that the unanimous consent of all its managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 2 contracts
Sources: Secured Loan and Servicing Agreement (NewStar Financial, Inc.), Secured Loan and Servicing Agreement (NewStar Financial, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawdate hereof.
Appears in 2 contracts
Sources: Sale and Servicing Agreement (Capitalsource Inc), Sale and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business; provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (Credit Acceptance Corp), Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities, or divide or permit any division of the Borrower;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements relating to the acquisition and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Transferor or any other Person;
(xiii) except as provided for in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equityholder of the Borrower to make any additional capital contributions;
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) its Affiliate; provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetsheet (if any);
(xix) fail to pay its own liabilities and expenses only out of its own funds[reserved];
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor or as otherwise permitted hereunder;
(xxii) guarantee any obligation of any Person, including an Affiliate[reserved];
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent manager or director member (the “Independent ManagerSpecial Member”) which shall be a natural Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative Agentthat routinely provides professional Special Members, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than as an Independent Manager of an Affiliate a Special Member of the Borrower that is not in the direct chain or any of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; provided that the Special Member may serve in similar capacities for other special purpose entities established from time to time by Affiliates of the Borrower; provided, further, that the Borrower shall have (10) Business Days to replace any Special Member with a person approved by the Administrative Agent in its reasonable discretion upon death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (aw) above by reason of being the Independent Manager Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent ManagerSpecial Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law.
Appears in 2 contracts
Sources: Loan and Security Agreement (Cim Real Estate Finance Trust, Inc.), Loan and Security Agreement (Cim Real Estate Finance Trust, Inc.)
Special Purpose Entity. At all times prior to on and after the Closing Date through (but not including) Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the SellerSeller or its Affiliates, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o6.2(n)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, on the Seller one hand, and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except pursuant to this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent to the filing of any petitionpetition as to the Borrower, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statementsbooks and records, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) its Affiliates so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Company or Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviixxvi) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causecomplied with;
(xxviiixxvii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent Collateral Agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is or to the extent that such failure does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconstitute a breach of Section 5.1(k).
Appears in 2 contracts
Sources: Loan and Security Agreement (Kayne Anderson BDC, Inc.), Loan and Security Agreement (Kayne Anderson BDC, Inc.)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 2 contracts
Sources: Credit Agreement (Regional Management Corp.), Credit Agreement (Regional Management Corp.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, origination, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents Documents, the entry into any and all documents and agreements in connection therewith, including, without limitation, any documents any agreements pertaining to the supervision and funding of the Borrower to exercise any and all rights with respect thereto and to establish, hold and maintain deposit accounts, and such other activities as are incidental theretoincidental, necessary or appropriate thereto or to accomplish the foregoing;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower Borrower, the ownership of the Collateral and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii)this Agreement, fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, agreement or fail to observe observe, in all material respects, limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments, (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.) and (3) Indebtedness pursuant to the Transaction Documents or any agreement for the sale or disposition of Loans;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Selleran Affiliate Transferor, and sales of Collateral to the Seller an Affiliate Transferor, and distributions (including Permitted RIC Distributions) to its Affiliates, each member in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents terms hereof shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partpart or divide or permit any division of the Borrower;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, on the Seller one hand, and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations (to the extent there exists sufficient cash flow from the Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that its Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own fundsfunds (including funds contributed to its capital by the Equityholder) (to the extent there exists sufficient cash flow from the Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyany (for the avoidance of doubt, such number may be zero);
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity SecurityLien, pledge its assets to secure the obligations of any other Person;
(xxvixxv) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ Management & Associates, National Registered Agents, Inc., Wilmington Trust Company, Lord Securities Corporation, Global Securitization Services Citadel SPV or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager or any Affiliate Transferor and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower Borrower, or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower Borrower, that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers independent managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers independent managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier a person described in (a) or service provider(b) above; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviixxvi) fail to ensure that all limited liability company action actions relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causecomplied with;
(xxviiixxvii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is or to the extent that such failure does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconstitute a breach of Section 5.1(k).
Appears in 2 contracts
Sources: Loan and Security Agreement (Stepstone Private Credit Fund LLC), Loan and Security Agreement (Stepstone Private Credit Fund LLC)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower such Loan Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the SellerSeller or its Affiliates, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partpart or divide or permit any division of such Loan Party;
(xii) fail to correct any known misunderstandings regarding the separate identities of such Loan Party, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent to the filing of any petitionpetition as to such Loan Party, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrowersuch Loan Party’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that its Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower such Loan Party from such Person and to indicate that the Borrowersuch Loan Party’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrowersuch Loan Party’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate, if applicable;
(xxivxxiii) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ Management & Associates, National Registered Agents, Inc., Wilmington Trust Company, Lord Securities Corporation, Global Securitization Services Citadel SPV or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrowersuch Loan Party, the Seller or the Collateral Manager Servicer and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower such Loan Party, or any of its equityholders, the Collateral Manager Servicer or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower such Loan Party, that is not in the direct chain of ownership of the Borrower such Loan Party and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers independent managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrowersuch Loan Party, the Collateral Manager Servicer or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers independent managers and other corporate services to the Borrowersuch Loan Party, the Collateral Manager Servicer or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower such Loan Party shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearLoan Party;
(xxviixxvi) fail to ensure that all limited liability company action actions relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causecomplied with;
(xxviiixxvii) fail to provide that the unanimous consent of all managers (including the consent of the Borrowersuch Loan Party’s Independent Manager) is required for the Borrower such Loan Party to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrowersuch Loan Party, (e) make any assignment for the benefit of the Borrowersuch Loan Party’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower such Loan Party is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is or to the extent that such failure does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconstitute a breach of Section 5.1(k).
Appears in 2 contracts
Sources: Loan and Security Agreement (Blue Owl Credit Income Corp.), Loan and Security Agreement (Owl Rock Core Income Corp.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate Equityholder so long as the separateness of the Borrower from such Person the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or the Equityholder or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller Equityholder or an Affiliate), or (b) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 2 contracts
Sources: Loan and Security Agreement (NMF SLF I, Inc.), Loan and Security Agreement (NMF SLF I, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company organizational formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent; provided that, if required or deemed advisable by the Fund in connection with the Fund’s maintenance of its status or eligibility to be taxed as a Regulated Investment Company (as determined by the Fund in its reasonable discretion), the Borrower may form a wholly owned Subsidiary and contribute to such Subsidiary any Equity Security or any other asset that is not an Eligible Loan, subject to the satisfaction of the following conditions (as determined by the Administrative Agent in its reasonable discretion): (A) such Subsidiary becomes jointly and severally liable for all obligations of the Borrower under this Agreement and (B) the Borrower has furnished to the Administrative Agent information and documentation reasonably requested by the Administrative Agent or any Lender for the purpose of compliance with “know your customer” laws, including the Beneficial Ownership Regulation, with respect to such Subsidiary;
(vi) fail to hold all of its assets solely in its own name;
(vii) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viiviii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Loan Advances owed to the Lenders and a termination of all the Commitments;
(viiiix) become insolvent or fail to pay its debts and liabilities solely from its own assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xxi) enter into any contract or agreement with any Person, except (a) including the Transaction Documents Documents, Underlying Instruments, purchase, sale or transfer agreements related to Collateral, and (b) other contracts or agreements that are incidental thereto, except in the ordinary course of business and upon terms and conditions that are commercially reasonable reasonable, intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with unrelated third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrowerparties;
(xixii) seek its termination, winding up, liquidation and/or dissolution or winding up in whole or in partpart unless required by Applicable Laws;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Equityholder, the Transferor or any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file or consent ; provided that the foregoing shall not require any holder of Capital Stock of the Borrower to the filing of make any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsadditional capital contributions;
(xvii) except as may be required divide or permitted by permit any division of the Code and regulations or other applicable state or local tax law, Borrower;
(xviii) hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) its Affiliate; provided that that, so long as permitted by Applicable Laws, (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxx) [reserved];
(xxi) fail to pay its own liabilities and expenses only out maintain a sufficient number of employees, if any, in light of its own funds;
(xx) fail contemplated business operations or to pay the salaries of its own employees, if any;
(xxixxii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates, it being understood that this clause (xxii) shall not prevent the Borrower from acquiring Loans from the Equityholder or its Affiliates acquiring Loans from the Borrower or membersits Affiliates;
(xxiixxiii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including including, without limitation, paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate stationery, invoices and checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge maintain its assets in such a manner that will be costly or difficult to secure the obligations segregate, ascertain or identify its individual assets from those of any other Person;
(xxvixxvii) pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(A) except while a vacancy is being filled as provided in clause (C), fail at any time to have at least one (1) duly appointed independent manager or director (the “Independent Manager”) which (a) shall be a natural Person approved by the Administrative Agent in its sole discretion, (b) shall be a Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who experience, (c) is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization ICG Services orLimited, if none of those companies is then providing professional Independent ManagersCircumference FS, HighWater or One Group Solutions, or another nationally recognized company reasonably approved by the Administrative Agent, in each case Agent that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers independent managers or independent directors and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and (d) is not, and has never been, and will not while serving as Independent Manager be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than his or her service as an Independent Manager independent manager or independent director (including a manager or a director of an Affiliate independent general partner or similar managing entity) of the Borrower that is not in the direct chain or any of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers its equityholders or directorsAffiliates); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers independent managers or independent directors and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; (B) fail to ensure that any action relating to the selection or replacement of the Independent Manager during the Covenant Compliance Period shall require the written consent of the Administrative Agent or (C) if an Independent Manager resigns, is removed or becomes deceased, fail to ensure that a successor Independent Manager is appointed as soon as possible. A For the avoidance of doubt, a natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (aw) above by reason of being a person qualifying under the Independent Manager of a “special purpose entity” affiliated with description in the Borrower parenthetical thereof and otherwise satisfies the conditions set forth in the foregoing clauses (a) through (d) shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers (including members and the consent of the Borrower’s Independent Manager) Manager is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxx) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes material taxes required to be paid under Applicable Lawapplicable law except taxes that are being contested in good faith by appropriate proceedings and for which it has set aside on its books adequate reserves in accordance with GAAP.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Phillip Street Middle Market Lending Fund LLC)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) other than prior to the Effective Date. (A) fail at any time to have at least one (1) independent manager or director member (the “Independent ManagerSpecial Member”) which shall be a natural Person approved by Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than as an Independent Manager of an Affiliate a Special Member of the Borrower that is not in the direct chain or any of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; provided that the Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its sole discretion upon the death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (aw) by reason of being the Independent Manager Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent ManagerSpecial Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate terminate, wind up or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Loan Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its termination, winding up, liquidation and/or dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Fund or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Fund;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson (other than the Secured Parties hereunder);
(xxvi) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) which shall be a natural Person who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience and who is provided by CT Corporation, Corporation Service Company, Citadel SPV LLC, Cogency Global, Inc., ▇▇▇▇▇▇▇ & Associates, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Company or Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower or any of its Affiliates that is does not own a direct or indirection equity interest in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (aw) above by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower that does not own a direct or indirect equity interest in the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal federal, state, local or state other law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, provisional liquidator, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law; or
(xxix) divide or permit any division of the Borrower.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (First Eagle Credit Opportunities Fund)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents, (ii) with respect to any Revolving Loan or Delayed Draw Loan owned by the Secured Parties hereunder or Borrower, obligations to fund under the terms of the Underlying Instruments and (iii) Indebtedness in conjunction with a repayment of all Advances owed to the Lenders Obligations and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements on customary terms relating to the acquisition, origination and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s 's assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s 's own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent manager or director member (the “Independent Manager”"Special Member") which shall be a natural Person approved by Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent directora Special Member, independent manager or independent member with at least three years of employment experience and who is provided by Citadel SPV, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager their respective equityholders or Affiliates (other than as an Independent Manager a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (aw) above by reason of being the Independent Manager Special Member of a “"special purpose entity” " affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, Borrower provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s 's annual income for that year; provided, further, that Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its reasonable discretion upon the death, resignation or incapacitation of the current Special Member;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent Manager's Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s 's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid by it under Applicable Lawapplicable law.
Appears in 1 contract
Sources: Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Equityholder has not and shall not:
(i) engage in any business or activity other than (x) the transactions contemplated by the Repo Transaction Documents (as defined in the Repo Termination Agreement), (y) the entry into the Repo Termination Agreement, and (z) the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the Equityholder and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity Subsidiary (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Borrower) or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson (other than the Borrower);
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Repo Transaction Documents and (as defined in the Repo Termination Agreement), (b) the Repo Termination Agreement, (c) the Transaction Documents, (d) the documents specifically contemplated by the Equityholder LLC Agreement, (e) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Equityholder and CIC or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (other than the Borrower);
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person (other than for tax purpose) or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the BorrowerEquityholder’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) CIC so long as appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower Equityholder from such Person CIC and to indicate that the Borrowerunavailability of the Equityholder’s assets and credit are not available to satisfy the debts and other obligations of such Person CIC or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetPerson;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson (other than the Borrower);
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an currently (a) a manager, officer, employee or Affiliate of the Borrower, the Seller Equityholder, or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businessor any major creditor, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) or a member, partner, equityholder, manager, director, officer or employee of any such Affiliate (other than an independent manager or similar position of the Borrower or any of its equityholdersBorrower, the Equityholder, the Collateral Manager or Affiliates an Affiliate), or (b) the beneficial owner of any limited liability company interests of the Equityholder or any voting, investment or other than as an Independent Manager ownership interests of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers Equityholder or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Constitutive Documents of the Equityholder;
(xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower Equityholder to (a) institute proceedings to be adjudicated adjudicated, bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition or answer seeking or consent to reorganization reorganization, arrangement, composition, readjustment or similar relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerEquityholder, (e) make any assignment for the benefit of the BorrowerEquityholder’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, (g) file an answer or other pleading admitting or failing to contest the material litigation of a petition filed in any proceeding of this nature, or (gh) take any action in furtherance of any of the foregoing; orand
(xxixxxvii) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of W▇▇▇▇ & Case LLP, except to dated as of the extent that date hereof upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to (a) Except as specifically permitted in this Agreement and in connection with the Collection DateOriginal Credit Facilities, the Borrower has not and shall not:
(i) engage entered into any transaction of acquisition (except as provided in the Lease/Purchase Documents), merger, consolidation or amalgamation, or taken any business action to liquidate, wind up or activity other than the purchasedissolve itself, receiptnor has it suffered any liquidation or dissolution, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or (ii) created any Subsidiaries, or acquired by purchase or otherwise dispose of all or substantially all the business or assets (except as provided in the Lease/Purchase Documents) of, or stock or other evidences of beneficial ownership of, or made any investment in, any Person, or (iii) made any material change in its present method of conducting business or (iv) amended the terms of its organizational documents or taken any action that might cause it to become insolvent;
(b) the Borrower has not contemplated and is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws, or the liquidation of all or a major portion of its assets (other than in accordance with or property, and the provisions hereof), without in each case first obtaining Borrower has no knowledge of any Person contemplating the prior written consent filing of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Datepetition against it;
(ivc) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formationBorrower has not become obligated for, or without the prior written consent of the Administrative Agentotherwise held out its credit or assets as being available to satisfy obligations of, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viid) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), the Borrower was organized for the sole purpose of buying from and leasing back assets to the Company; other than Indebtedness in connection with the Original Credit Facilities, the Borrower has not during its existence, and will not, engage in any business unrelated to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders such activities and a termination of all the Commitmentswill conduct and operate its business as presently conducted and operated;
(viiie) become insolvent the Borrower will maintain an arm's length relationship with the sole shareholder or fail to pay its debts any Affiliate of the Borrower and liabilities from its assets as the same shall become due;
(ix) fail to maintain its recordsBorrower has not entered into, books of account and bank accounts separate and apart from those of any other Person;
(x) will not enter into into, any contract or agreement with such shareholder or any PersonAffiliate of the Borrower, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with unrelated third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrowerparties;
(xif) seek its dissolution the Borrower has not incurred, and will not incur, any Indebtedness or winding up material liabilities, secured or unsecured, direct or contingent (including any Guarantee Obligation), other than under the Original Credit Facilities (which will be discharged at the closing hereunder) and other than the Indebtedness permitted hereunder; the Borrower has not granted, and will not grant, any Lien except for Liens under the Original Credit Facilities (which will be discharged at the closing hereunder) and except in whole or in partfavor of the Administrative Agent;
(xiig) fail except as specifically permitted in this Agreement or as provided in the Lease/Purchase Documents, and except for activities pursuant to correct any known misunderstandings regarding the separate identities of the BorrowerOriginal Credit Facilities, the Seller Borrower has not made, nor will it make, any loans or advances to any other Person (including any Affiliate) or buy or hold evidence of any Indebtedness issued by any other Person (other than Investments permitted hereunder). Except as specifically permitted in this Agreement and except for activities pursuant to the Original Credit Facilities, the Borrower has not and will not pledge its assets for the benefit of any other Person;
(xiiih) guaranteethe Borrower has always been, become obligated foris, or hold itself out to and will be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate solvent and distinct will pay its debts and liabilities from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others assets as to the identity of same shall become due; the Person with which such other party is transacting businessBorrower has maintained, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintains 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;
(xvii) file or consent to the filing Borrower has maintained and will maintain its own separate books and records and bank accounts, which are and will be, in each case separate and apart from those of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiij) fail the Borrower has been, is and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate thereof), has maintained and utilized and shall maintain and utilize separate stationery, invoices and checks bearing its own name, has otherwise conducted and shall otherwise conduct its business and own its assets in its own name, and has and shall correct any known misunderstanding regarding its separate identity;
(k) subject to the requirements of the Tax Matters Agreement (and, in respect of matters prior to the closing hereunder, the tax matters agreement entered into in connection with the Original Credit Facilities), the Borrower has and will maintain separate financial statements, statements showing its assets and liabilities separate and apart from those of any other Person and Person, not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person another, and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s will file its own separate balance sheettax returns;
(xixl) fail to pay its own liabilities and expenses only out the Borrower has not sought nor will it seek the dissolution or winding up, in whole or in part, of its own fundsthe Borrower;
(xxm) fail to pay the salaries of Borrower has not commingled, and will not commingle, its own employees, if any;
(xxi) except in connection funds or other assets with any exchange offer, work-out, restructuring or the exercise those of any rights Affiliate or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvin) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who Borrower has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never beenmaintained, and will not while serving maintain, its assets in such a manner making it costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any other Person and, if requested by the Administrative Agent to do so after an Event of Default, will cause its assets leased to any other Person to be identified clearly thereon as Independent Manager be, owned by the Borrower;
(o) the Borrower will not do any act which would make it impossible to carry on the ordinary business of the following: Borrower;
(ap) a member, partner, equityholder, manager, director, officer or employee of the Borrower has not, and will not, file or consent to the filing of a petition for bankruptcy, reorganization, assignment for the benefit of creditors or similar proceeding under any of its equityholdersfederal or state bankruptcy, the Collateral Manager insolvency, reorganization or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) similar law with respect to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, conservator, assignee, trustee, sequestrator, collateral agent custodian or any other similar official for of Borrower or a substantial part of the property of the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) or admit in writing its the inability of Borrower to pay its debts generally as they become due, or, except as expressly permitted under this Agreement, engage in transactions with Affiliates, or (g) take or induce any other entity to take any action in furtherance of any of the foregoing; orforegoing actions, without the unanimous consent of its board of directors;
(xxixq) fail to file the Borrower has observed and will observe all corporate formalities;
(r) the Borrower has not acquired, and will not acquire, the obligations or securities of any of its own Tax returns separate from those partners, Affiliates, members or shareholders, as applicable;
(s) the Borrower has not paid, and shall not pay, for any overhead or other expenses of any other Person;
(t) the Borrower has complied at all times with each of the representations and warranties contained in this Section, except and at all times complied with each of the representations, warranties and covenants set forth in Section 11 of the Original Credit Agreement;
(u) the Borrower shall at all times have only Independent Directors, whose vote shall be required in connection with all Major Decisions of the Borrower; and
(v) the Borrower's Certificate of Incorporation conforms in all material respects to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawprovisions of this Section 4.27.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) Reserved;
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.separate
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;Borrower; 57
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of Skadden, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement and Backup Servicing Agreement (Credit Acceptance Corp)
Special Purpose Entity. At It acknowledges that the Lenders are entering into the transactions contemplated by this Agreement in reliance upon its identity as a legal entity that is separate from the Parent. Therefore, from and after the date of execution and delivery of this Agreement, it shall take all times prior reasonable steps to maintain its separate legal identity and to make it manifest to third parties that it is an entity with assets and liabilities distinct from those of the Parent and not just a division of the Parent. Without limiting the generality of the foregoing and in addition to the Collection Dateother covenants set forth herein, it will not hold itself out to third parties as liable for the Borrower debts of the Parent. In addition, it has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralCollateral and related assets, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets, (b) Permitted Investments and (c) incidental property as may be necessary for the its operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, ) or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, without in connection with any each case first obtaining the consent of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) control the decision or actions respecting the daily business or affairs of any other Person except as otherwise permitted under clause this Agreement;
(iii), v) fail to preserve its existence as an entity duly organizedformed, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agenteach Lender, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementorganizational documents, or fail to observe limited liability company formalities;
(vvi) formoperate, acquire or own any Subsidiarypurport to operate, own any Capital Stock in any other collectively as a single or consolidated business entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerother Person (except as may be required for U.S. federal income tax purposes and except for accounting purposes, work-out or restructuring of a Loanit may be consolidated with other Persons (including the Parent) as permitted by GAAP), ;
(vii) own any Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agenteach Lender;
(viviii) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viiix) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsLenders;
(viiix) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixxi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xxii) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xixiii) seek its dissolution or winding up in whole or in part;
(xiixiv) fail to correct any known misunderstandings regarding the its separate identities of the Borrower, the Seller identity and any Affiliate or any principal thereof or any other Person;
(xiiixv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name (other than for U.S. income tax purposes) in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person Person, except to the extent that its financial and not have its assets listed on any financial statement operating results are consolidated with those of any other Person; provided, however, that the Borrower’s assets may be included Parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetstatements;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders, other than with respect to any Eligible Loan whose Obligor is an Affiliate of the Collateral Manager or the Parent so long as such Eligible Loan shall have been acquired from a Person who is not Affiliated with the Collateral Manager or the Parent;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person[reserved];
(xxvi) fail at pledge its assets for the benefit of any time other Person, other than with respect to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate payment of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) indebtedness to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business)Secured Parties hereunder; (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;and
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s maintain at least one Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Sources: Facility Agreement (AB Private Credit Investors Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own namebank accounts;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawdate hereof.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i1) engage in any business or activity other than the purchasepurchase and receipt of Assets and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii2) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii3) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and the Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv4) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and the Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v5) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and the Purchaser Agent;
(vi6) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii7) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchaser, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) 8) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix9) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x10) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi11) seek its dissolution or winding up in whole or in part;
(xii12) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii13) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv14) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(15) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Code and regulations;
(16) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv17) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi18) 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, or make an assignment for the benefit of creditors;
(xvii19) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii20) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and the Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(21) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix22) fail to pay its own liabilities and expenses only out of its own funds;
(xx23) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxi24) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii25) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv26) fail to use separate invoices and checks bearing its own name;
(xxv27) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi28) fail at any time to have at least one (1) independent manager or director (the “an "Independent Manager”Director") who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five (5) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer; provided, however, such Independent Manager Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviii29) fail to provide that have the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the Borrower’s Seller's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxix30) fail to file its own Tax returns separate from those comply with the assumptions specified in the non-consolidation opinion of any other Person▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of February 28, 2003, upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan Certificate and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Deal Agent’s consent (acting at the direction, or with the consent, of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentDeal Agent (acting at the direction, or with the consent, of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentDeal Agent (acting at the direction, or with the consent, of the Required Lenders);
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Secured Parties, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and is paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of more than a 49% direct or indirect ownership interest in the Borrower, unless the Borrower delivers to the Deal Agent and the Lenders an acceptable non-consolidation opinion;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included Person (except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors, each of whom (A) is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five (5) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade creditor or shareholder (or spouse, supplier parent, sibling or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any child of the foregoing; or
) of (xxixI) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.Servicer,
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralCollateral and related assets from the Originator under the Sale Agreement, the transfer sale and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, without in connection with any each case first obtaining the consent of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateAdministrative Agent and each Purchaser Agent;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Intercreditor Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that, such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Borrower and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than the Loans, cash and Permitted Investments);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower to the extent it has the ability to control the same, unless the Borrower delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxiixxv) guarantee any obligation of any Personperson, including an Affiliate;
(xxiiixxvi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvii) fail to use separate invoices and checks bearing its own name;
(xxvxxviii) except for any Permitted Lien relating to any Equity Security, pledge or permit the pledge of its assets to secure or ownership interests in the obligations Borrower for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxix) fail at any time to have at least one (1) independent manager or director (the an “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) currently a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade creditor shareholder, supplier manager or service provider; member (or (dspouse, parent, sibling or child of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Borrower, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer; provided, however, such Independent Manager may be an independent manager or an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager to be removed without causeManagers);
(xxviiixxx) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxxi) fail take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, dated as of the date hereof, upon which the conclusions expressed therein are based.
(xxxii) The Borrower has received in writing from the Originator confirmation that the Originator will not cause the Borrower to file its own Tax returns separate from those of any other Person, except to a voluntary petition under the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawBankruptcy Code or Insolvency Laws.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent except with respect to the “Issuer” (as defined in the Indenture);
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawClosing Date.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person;, except to the extent contemplated by this Agreement; 111
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(iv) except elect for the Borrower to be treated, or otherwise become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe Delaware limited liability company formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixviii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent an acceptable non-consolidation opinion;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay or cause to be paid the salaries of its own employees, if any;
(xxi) except applicable, in connection with any exchange offer, work-out, restructuring or the exercise light of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliatecontemplated business operations;
(xxiii) acquire obligations or securities of its Affiliates or stockholders;
(xxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) fail to use separate invoices and checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxvii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causeRegional Management;
(xxviii) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxix) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxx) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxi) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Effective Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i1) engage in any business or activity other than the purchasepurchase and receipt of Assets and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii2) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii3) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv4) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v5) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi6) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii7) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchaser, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) 8) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix9) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x10) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi11) seek its dissolution or winding up in whole or in part;
(xii12) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii13) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv14) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(15) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(16) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv17) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi18) 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, or make an assignment for the benefit of creditors;
(xvii19) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii20) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(21) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix22) fail to pay its own liabilities and expenses only out of its own funds;
(xx23) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxi24) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii25) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv26) fail to use separate invoices and checks bearing its own name;
(xxv27) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi28) fail at any time to have at least one (1) independent manager or director (the an “Independent ManagerDirector”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five (5) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer; provided, however, such Independent Manager Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviii29) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxix30) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan Certificate and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to The Issuer and the Collection Date, the Borrower has not and Subsidiary Guarantors shall not:
(i1) engage in any business or activity other than (i) the purchasedevelopment and operation of the Projects and any Additional Projects, receipt, management and sale of Collateral, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction DocumentsCollateral Documents and the transfer and pledge of any collateral pursuant to the terms of the collateral documents relating to any Additional Project Debt, (iii) the entry into and the performance under the Transaction Documents to which it is a party and any Additional Transaction Documents to which it is a party, including, in each case, any customary agreements relating to the financing of the Projects or any Additional Projects, and (iv) such other activities as are incidental thereto;
(ii2) acquire or own any material assets other than (ai) the Collateral or Projects, any Additional Projects, (biii) any incidental property as may be necessary or desirable for the development and operation of the Borrower Projects and any Additional Projects, (iii) the performance Equity Interests of its obligations the Company Parties or any other Subsidiary permitted pursuant to Section 4.19(4) below, (iv) rights under the Transaction Documents, any Additional Transaction Documents includingand the Datacenter Leases and (v) Cash, without limitation, capital contributions which it may receive from the EquityholderCash Equivalents and deposit and securities accounts;
(iii3) except as permitted by this Indenture (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateincorporation;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v4) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors than, subject to the satisfaction of the Additional Project Debt Conditions, in connection with an Additional Project or to the exercise extent permitted in its memorandum and articles or in connection with a transfer of any remedies with respect Property to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agentsuch Subsidiary;
(vi5) [reserved];
(6) without limiting the ability to make payments permitted to be made under, or otherwise comply with its obligations under or in connection with, the Transaction Documents or any Additional Transaction Documents, commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson other than a Company Party;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x7) enter into any contract or agreement with any PersonPerson (other than another Company Party), except (ai) as otherwise permitted under the Notes Documents, (ii) the Transaction Documents or any Additional Transaction Documents, in each case to which it is a party, including, in each case, any customary agreements relating to the financing of the Project or any Additional Project, (iii) organizational documents and (biv) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for Person (as determined by the avoidance of doubt with regard to this clause (xIssuer in good faith), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) 8) seek its dissolution or winding up in whole or in part;
(xii9) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of the BorrowerIssuer, on the Seller one hand, and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii10) except as permitted by the Notes Documents, guarantee, become obligated for, or hold itself out to be responsible for the debt Debt of another Person;
(xiv11) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Debt of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or permitted pursuant to the Transaction Documents and any Additional Transaction Documents));
(xv12) fail fail, to the extent of its own funds (taking into account the requirements in the Notes Documents and any Additional Project Debt), 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;
(xvi13) 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, or make an assignment for the benefit of creditors[reserved];
(xvii14) except without limiting the appointment of officers, maintain, hire or employ any individuals as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Personemployees;
(xviii15) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than a Company Party or any other Subsidiary permitted pursuant to Section 4.19(4) above);
(xxii16) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;, except as permitted by the Notes Documents; or
(xxvi17) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy Insolvency or insolvency proceedings Liquidation Proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the BorrowerIssuer, (ev) make any general assignment for the benefit of the BorrowerIssuer’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Sources: Indenture (Applied Digital Corp.)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, agreement or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors or issuers in connection with the exercise of any remedies with respect to a Loan Portfolio Investment or any exchange offer, work-out or restructuring of a LoanPortfolio Investment), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors or issuers in connection with the exercise of any remedies with respect to a Loan Portfolio Investment or any exchange offer, work-out or restructuring of a LoanPortfolio Investment) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the CommitmentsCommitments and (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, on the Seller one hand, and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiii) except pursuant to this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixvii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that its Affiliates so long as (a) appropriate notation shall be made on the notes of such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxviii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxix) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxixx) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (unless approved in writing by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxi) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxvxxii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxiii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another a nationally recognized company reasonably approved by the Administrative Agentproviding professional independent managers, in each case that is not an Affiliate of the Borrower, the Seller Borrower or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviixxiv) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxv) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is or to the extent that such failure does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconstitute a breach of Section 5.1(k).
Appears in 1 contract
Sources: Loan and Security Agreement (Kayne Anderson BDC, Inc.)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become duedue[Reserved];
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, The Borrower shall not (nor has the Borrower has not and shall not:taken any such action in the past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets from UACC under the Purchase Agreement, the transfer and pledge of Receivables and other Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets from UACC under the Purchase Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreementFormation Documents or other governing documents, as applicable, or fail to observe limited liability company corporate formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viii) become insolvent not Solvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, except as contemplated hereunder or under the Intercreditor Agreement;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the BorrowerBorrower or UACC, the Seller as applicable, or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person, except as expressly provided in the Basic Documents;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statuteInsolvency Laws, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixix) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included a direct or indirect ownership interest in a consolidated financial statement of an Affiliate of the Borrower or (other than in accordance with the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Trust Agreement), unless the Borrower from such Person and delivers to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetAdministrative Agent an acceptable non-consolidation opinion;
(xixxx) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Lenders hereunder;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviixxv) fail to ensure include provisions in the Trust Agreement that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including require the consent of the Borrower’s Independent Manager) Owner Trustee is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state State law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing;
(xxvi) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents;
(xxvii) not take or refrain from taking, as applicable, each of [***], dated the Closing Date;
(xxviii) elect or otherwise permit the Borrower to be treated as an entity taxable as a corporation for U.S. federal income tax purposes; orand
(xxix) fail to file maintain separate financial statements, showing its own Tax returns assets and liabilities separate and apart from those of any other Person, except to or have its assets listed on the extent financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliates if (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower is treated as a “disregarded entity” for Tax purposes from such Affiliates and is to indicate that the Borrower’s assets and credit are not required available to file Tax returns under Applicable Law, satisfy the debts and pay obligations of such Affiliates or any Taxes required to other Person and (b) such assets shall also be paid under Applicable Lawlisted on the Borrower’s own separate balance sheet.
Appears in 1 contract
Sources: Warehouse Agreement (Vroom, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitments;note and paid when due; 57
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if any;employees in light of its contemplated business operations; 58
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management acquisition and sale receipt of CollateralAssets and related assets from the Depositor under the Depositor Sale Agreement, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Depositor under the Depositor Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower Seller and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure or jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organizeda Delaware statutory trust, validly existing and in good standing under the laws of the jurisdiction of its organization or formationDelaware, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, the Trust Agreement or fail to observe limited liability company statutory trust formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Concentration Account Agreement, commingle its assets with the assets of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Purchasers and the Secured Parties in connection with the Transaction Documents, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a termination of all the Commitmentsnote and is paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold any evidence of indebtedness issued by any other Person (other than the Assets, cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) except as set forth in the Transaction Documents, fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersAffiliates;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person;Person except as set forth in the Transaction Documents; and
(xxvixxviii) fail at any time to have at least one (1) independent manager take or director (refrain from taking, as applicable, each of the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years activities specified in the non-consolidation opinion of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company▇▇▇▇▇ LLP, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate dated as of the BorrowerEffective Date, upon which the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager conclusions expressed therein are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawbased.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase 105 Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part; 106
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;; 107
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and 108
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(ia) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iib) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iiic) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(ivd) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(ve) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerPortfolio Investments, work-out or restructuring of a LoanCash and Cash Equivalents) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Loans owed to the Lenders and a termination of all the Commitments;
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents and (bii) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerAffiliate;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to correct any known misunderstandings regarding the separate identities identity of Borrower and the Borrower, the Seller Parent or any other Person;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvip) 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, or make an assignment for the benefit of creditors;
(xviiq) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiir) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixs) fail to pay its own liabilities and expenses only out of its own funds;
(xxt) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxiiu) guarantee any obligation of any Personperson, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivw) fail to use separate invoices and checks bearing its own name;
(xxvx) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) which manager must, in each such instance, be a natural person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience experience, and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (av) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager respective equityholders or Affiliates (other than as an Independent Manager of Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (av), (bx) or (cy) above; or (ii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager shall require the written consent of the Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (av) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiiz) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxixaa) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law; or
(bb) fail to comply with the special purpose entity requirements set forth in this Section 8.1.26 such that Eversheds S▇▇▇▇▇▇▇▇▇ (US) LLP or another law firm reasonably acceptable to the Agent could no longer render a substantive nonconsolidation opinion with respect to Borrower.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholder;foregoing; LEGAL02/42658427v2
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other LEGAL02/42658427v2 Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;; LEGAL02/42658427v2
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Sources: Loan and Security Agreement (Fifth Street Senior Floating Rate Corp.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i1) engage in any business or activity other than the purchasepurchase and receipt of Assets and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii2) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii3) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv4) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v5) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi6) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii7) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchaser, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) 8) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix9) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x10) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi11) seek its dissolution or winding up in whole or in part;
(xii12) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii13) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv14) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(15) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(16) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv17) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi18) 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, or make an assignment for the benefit of creditors;
(xvii19) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii20) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(21) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix22) fail to pay its own liabilities and expenses only out of its own funds;
(xx23) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxi24) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii25) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv26) fail to use separate invoices and checks bearing its own name;
(xxv27) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi28) fail at any time to have at least one (1) independent manager or director (the “an "Independent Manager”Director") who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five (5) years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer; provided, however, such Independent Manager Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviii29) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the Borrower’s Seller's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxix30) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of April 24, 2002, upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan Certificate and Servicing Agreement (Capitalsource Inc)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholder;foregoing; LEGAL02/41783784v7
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other LEGAL02/41783784v7 Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;; LEGAL02/41783784v7
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to Until the Collection DateDebt has been paid in full, the Borrower has not hereby represents, warrants and covenants that it is and shall not:
(i) engage in any business continue to be a Special Purpose Entity. A “Special Purpose Entity” means a corporation, limited liability company or activity other than the purchasepartnership, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than which (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower does not have and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) will not incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness than, with respect to Borrower and, if Borrower is a partnership, each of its Special Purpose Entity general partners, the following: (i) the Debt, (ii) mortgage indebtedness incurred prior to the Secured Parties hereunder date hereof secured by the Property which has been assigned by the prior lender to Lender and amended and restated herein on or before the date hereof, (iii) trade payables and capital expenditures incurred in the ordinary course of the business of owning and operating the Property, provided that such trade payables and capital expenditures (A) shall not be evidenced by a note, (B) shall be paid within sixty (60) days of the date incurred and (C) shall not exceed, in the aggregate, three percent (3%) of the outstanding principal balance of the Loan at any one time, (iv) real estate taxes and assessments, and (v) obligations under equipment leases and purchase money financing arrangements entered into in connection with the leasing or purchase of equipment reasonably required in connection with the ownership and operation of the Property, provided that the sum of the purchase price (or in conjunction the case of leased equipment, the amount that would have been paid in order to purchase, instead of lease) for such equipment shall not exceed, in the aggregate, one percent (1%) of the outstanding principal balance of the Loan at any one time; (b) if such entity is a limited liability company, has as its manager or managing member a Special Purpose Entity that owns at least one half percent (.50%) of the membership interests of the limited liability company; (c) if such entity is a partnership, has a general partner of such entity that is a Special Purpose Entity that owns at least one percent (1.0%) of the partnership interests in such partnership, (d) has Charter Documents that provide that such entity will not: (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets or the assets of any entity in which it has a direct or indirect interest, except as otherwise provided in the Loan Documents; (3) engage in any other business activity, or amend its organizational documents with a repayment respect to the matters set forth in this Section 4.2 without the consent of the Lender; or (4) without the affirmative vote of all Advances owed of the directors of the corporation or directors or managers of a limited liability company (that is such entity, the managing member or a general partner of such entity), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest; and (e) at all times from and after the Cut-off Date (and to Borrower’s knowledge with respect to the Lenders representations in clauses (i), (ii) and (iii) below, from and after the date of its inception):
(i) has been, and continuing from and after the date hereof shall remain, organized solely for the purpose of (i) acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property, obtaining the Loan from Lender and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing; (ii) acting as a termination general partner of the partnership that owns the Property; or (iii) acting as a managing member of the general partners of the partnership that owns the Property;
(ii) has not engaged in, and continuing from and after the date hereof shall not engage in, any business or activity unrelated to (i) the acquisition, development, ownership, management or operation of the Property, (ii) acting as a member and or manager of the limited liability company that is a general partner of the partnership that owns the Property; or (iii) acting as a general partner of the partnership that owns the Property;
(iii) has not owned, and continuing from and after the date hereof shall not own, any material assets other than (i) the Property, (ii) such incidental Personal Property as may be necessary for the operation of the Property, (iii) the membership interest in the limited liability company that is a general partner of the partnership that owns the Property; or (iv) the general partnership interest in the partnership that owns the Property;
(iv) has not engaged in, sought or consented to, and continuing from and after the date hereof shall not engage in, seek or consent to, any dissolution, winding up, liquidation, consolidation, merger, or sale of all or substantially all of its assets, or transfer of its partnership or membership interests, or any stock or beneficial ownership of, any entity, except as permitted under Section 8 of this agreement;
(v) has preserved, and continuing from and after the Commitmentsdate hereof will preserve, its existence as an entity duly organized and validly existing under the laws of the jurisdiction of its organization or formation and will not without the prior written consent of Lender, amend, modify, terminate or fail to comply with the provisions of its operating agreement, articles of formation, partnership agreement or certificate of partnership, certificate of incorporation, by-laws or similar organizational documents, as the case may be (collectively, the “Charter Documents”), or consent to or suffer the amendment, modification, termination or breach of any of the Charter Documents, or amend, modify, terminate or fail to comply with, or consent or suffer the amendment, modification, termination or breach of any Charter Documents of any entity in which it owns an interest, in each case in such a manner as could reasonably jeopardize Borrower’s status as a bankruptcy remote entity;
(vi) has not owned, and continuing from and after the date hereof, shall not own or make any investment in, any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof or any fiduciary acting in such capacity on behalf of any of the foregoing (each, a “Person”) other than Borrower or a Special Purpose Entity owning an interest in Borrower;
(vii) has not commingled, and from and after the date hereof, shall not commingle its assets with the assets of any of its general partners, managing members, shareholders, Affiliates, principals or of any other person or entity;
(viii) become insolvent or fail has maintained, and from and after the date hereof shall maintain, its financial statements, accounting records, bank accounts and other entity documents separate and apart from those of the partners, members, shareholders, principals and Affiliates of such entity, and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except that such entity’s financial position, assets, results of operations and cash flows may be included in the consolidated financial statements of an Affiliate of such entity; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay its the debts and liabilities from its assets as of the same shall become dueconsolidated entity nor constitute obligations of the consolidated entity;
(ix) fail has not entered into or been a party to, and from and after the date hereof, will not enter into or be a party to maintain any contract or agreement with any general partner, managing member, shareholder, principal or Affiliate of Borrower, Guarantor or Indemnitor, or any general partner, managing member, shareholder, principal or Affiliate thereof, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available in a comparable arms-length basis with third parties;
(x) has maintained, and from and after the date hereof shall maintain, its recordsassets in such a manner that it will not be costly or difficult to segregate, books of account and bank accounts separate and apart ascertain or identify its individual assets from those of any other Person;
(xxi) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Sellerhas not made, and sales of Collateral from and after the date hereof shall not make any loans to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partany third party;
(xii) fail to correct any known misunderstandings regarding has held itself out and identified itself, and from and after the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or date hereof shall hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out and identify itself, to the public as a legal entity separate and distinct from any other Person or to conduct Person;
(xiii) has conducted, and from and after the date hereof shall conduct, its business, including all oral and written communications business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it such entity is responsible for the debts of any third party (including any general partner, managing member, shareholder, principal or Affiliate of such entity, but not including any Special Purpose Entity limited partnership of which such entity is expressly permitted to be a general partner in accordance with the terms hereof);
(xiv) has remained, and from and after the date hereof intends to remain, solvent and which pay its principals debt and liabilities (including, as applicable, shared personnel and overhead expenses) from the revenue generated from the operation of the Property, provided that the foregoing covenant shall not require the general partners, shareholders or Affiliates)members, as the case may be, of such Special Purpose Entity to make any additional capital contributions to such Special Purpose Entity;
(xv) fail has maintained, and from and after the date hereof, will maintain, to maintain the extent available from the cash flow generated from the operation of the Property, adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations ;
(xvi) has filed, and from and after the date hereof, will file or consent its own tax returns, if any, as may be required under applicable law, to the extent such entity is (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division solely for tax purposes of another taxpayer, and has paid and will pay any petition, either voluntary or involuntary, taxes so required to take advantage of any be paid under applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorslaw;
(xvii) except as may be required or permitted by has allocated, and from and after the Code and regulations or other applicable state or local tax lawdate hereof, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to will allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxviii) fail has not failed, and from and after the date hereof shall not fail, to use correct any known misunderstanding regarding the separate invoices identity of such entity;
(xix) has held, and checks bearing from and after the date hereof shall hold, its assets in its own name and has conducted and will conduct its business in its own name;
(xx) has paid, and from and after the date hereof shall pay, its own liabilities and expenses;
(xxi) has observed, and from and after the date hereof shall observe, all corporate, limited liability company or partnership formalities, as applicable;
(xxii) has not assumed, guaranteed or become obligated for, and from and after the date hereof shall not assume or guarantee or become obligated for, the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except by virtue of its status as a Special Purpose Entity general partner of a Special Purpose Entity partnership that has been approved by Lender;
(xxiii) has not acquired, and from and after the date hereof, will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate;
(xxiv) has maintained and used, and from and after the date hereof will maintain and use, separate stationery, invoices and checks bearing its name;
(xxv) except for any Permitted Lien relating to any Equity Securityhas not pledged, pledge and from and after the date hereof shall not pledge, its assets to secure for the obligations benefit of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesshad, and which individual is duly appointed as an Independent Manager from and is not, and has never been, and after the date hereof will not while serving as Independent Manager behave, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or its obligations guaranteed by any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote such entity, provided that such Independent Manager except as is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates contemplated in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearthis agreement;
(xxvii) fail to ensure that has complied, and from and after the date hereof will comply, with all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholdermaterial terms and provisions contained in its Charter Documents; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;and
(xxviii) fail has conducted and operated, and from and after the date hereof shall conduct and operate, its business as presently conducted and operated and in compliance with the requirements of its Charter Documents. Borrower further warrants and represents that it is in compliance with and will continue to provide that the unanimous consent of comply with all managers (including the consent of the Borrowerassumptions made in that certain non-consolidation opinion letter dated the date hereof delivered by Jaffe, Raitt, Heuer & W▇▇▇▇, P.C. in connection with the Loan (the “Insolvency Opinion”). Notwithstanding the foregoing, the following operations and activities of Borrower and its Affiliates shall not be considered a violation of the covenants contained in this Section 4.2:
1. offering services to residents of the Property through Affiliates of Borrower or other third parties for which fees and charges may be collected by Borrower or the Affiliate and paid to such Affiliate or third party, which may include, without limitation, cable and internet services, landscaping, snow removal, lease or sale of manufactured homes, and child care; provided that such Affiliates do not conduct their business in the name of Borrower and that any agreements between Borrower and its Affiliates relating to such services are on commercially reasonable terms similar to those of an arm’s Independent Manager) is required length transaction;
2. depositing all gross revenue, whether cash, cash equivalents or similar assets, in an operating account maintained specifically for the Property (a “Property Operating Account”), after paying expenses of Borrower or causing SCOLP and/or Sponsor, to (a) institute proceedings pay such expenses, and distributing such remaining cash to be adjudicated bankrupt Sponsor, SCOLP, or insolventat the direction of Sponsor or SCOLP, (b) institute or consent as applicable, to any other Affiliate of Borrower, and in any case, distributing such remaining cash that does not belong to the institution Borrower promptly to such entities;
3. paying all payables, debts and other liabilities arising from or in connection with the operation of bankruptcy the Property from the Property Operating Account, or insolvency proceedings against itcausing SCOLP and/or Sponsor to pay such liabilities;
4. using ancillary assets in connection with the operation of the Property held in the name of Sponsor, (c) file a petition seeking SCOLP, or consent any of their Affiliates, such as vehicles and office and maintenance equipment;
5. treating the Property for all purposes as part of and within the portfolio of manufactured housing communities owned by SCOLP or its Affiliates, for marketing, promotion and providing information and reports to reorganization the public or relief under as required by any applicable federal or state law relating to bankruptcy or insolvencylaw; provided, (d) seek or consent to the appointment of a receiverhowever, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit that Borrower shall conduct business in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those name or its assumed or trade name; and/or
6. allocating general overhead and administrative costs incurred by Sponsor and SCOLP and/or other Affiliates of any other Person, except to the extent that the Borrower is treated as in a “disregarded entity” for Tax purposes fair and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawequitable manner.
Appears in 1 contract
Sources: Mortgage Modification Agreement (Sun Communities Inc)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend 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;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of A▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, wind-up, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementagreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestment otherwise permitted hereunder) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to incurred under the Secured Parties hereunder or in conjunction with a repayment terms of all Advances owed to the Lenders and a termination of all the CommitmentsTransaction Documents;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements relating to the acquisition and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution dissolution, termination, liquidation or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower from the Seller Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) except as may be required or permitted by the Code and U.S. Treasury regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) its Affiliates; provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds[Reserved];
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any Person, including an Affiliate[Reserved];
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) which shall be a natural Person and must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Associates or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain or any of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional as an Independent Managers and other corporate services to Manager of the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of businessthat is required by a creditor to be a single purpose bankruptcy remote entity); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (aw) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, ; provided that the fees that such individual earns from serving as Independent Manager of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year; [Willow Tree BDC] Amended and Restated Loan, Security and Collateral Management Agreement #506694681 provided that the Borrower shall have ten (10) Business Days to replace any Independent Manager upon the death, resignation or incapacitation of the current Independent Manager;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of (A) all managers members and (including B) the consent of the Borrower’s Independent Manager) Manager is required for the Borrower to (a1) institute proceedings to be adjudicated bankrupt or insolvent, (b2) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c3) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d4) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e5) make any assignment for the benefit of the Borrower’s creditors, (f6) admit in writing its inability to pay its debts generally as they become due, or (g7) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law.
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Willow Tree Capital Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(ia) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(iib) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iiic) merge into or consolidate with any Person or dissolve, divide, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(ivd) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(ve) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerPortfolio Investments, work-out or restructuring of a LoanCash and Cash Equivalents) without the prior written consent of the Administrative Agent;
(vif) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Loans owed to the Lenders and a termination of all the Commitments;
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents and (bii) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerAffiliate;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to correct any known misunderstandings regarding the separate identities identity of ▇▇▇▇▇▇▇▇ and the Borrower, the Seller Parent or any other Person;
(xiiim) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivn) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvo) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvip) 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, or make an assignment for the benefit of creditors;
(xviiq) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiir) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower▇▇▇▇▇▇▇▇’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixs) fail to pay its own liabilities and expenses only out of its own funds;
(xxt) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxiiu) guarantee any obligation of any Personperson, including an Affiliate;
(xxiiiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivw) fail to use separate invoices and checks bearing its own name;
(xxvx) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) which Independent Manager must, in each such instance, be a natural person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience experience, and who is provided by Cogency Global Inc., CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent Managersindependent managers, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers independent managers and other corporate services in the ordinary course Ordinary Course of its businessBusiness, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (av) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager respective equityholders or Affiliates (other than as an Independent Manager independent manager or special member of Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than an employee of a nationally recognized company that routinely provides professional Independent Managers independent managers and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course Ordinary Course of businessBusiness); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (av), (bx) or (cy) above; or (ii) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager shall require the written consent of the Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (av) by reason of being the Independent Manager independent manager or special member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager independent manager of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiiz) fail to provide that the unanimous consent of all managers (including the consent of the Borrower▇▇▇▇▇▇▇▇’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower▇▇▇▇▇▇▇▇, (e) make any assignment for the benefit of the Borrower▇▇▇▇▇▇▇▇’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or;
(xxixaa) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law; or
(bb) fail to comply with the special purpose entity requirements set forth in this Section 8.1.26 such that ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC or another law firm reasonably acceptable to the Agent could no longer render a substantive nonconsolidation opinion with respect to Borrower.
Appears in 1 contract
Sources: Loan and Security Agreement (Flat Rock Core Income Fund)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral Loans and rights in the Related Property, (b) the Equity Interests in any REO Affiliate, (c) Equity Securities acquired (i) if a Loan is no longer an Eligible Loan or (bii) in connection with the exercise of remedies or with respect to any work out or restructuring of a Loan and (d) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amendmake any material amendment or modification, modify, or terminate or fail to comply with the material provisions of its limited liability company agreementoperating agreement (which includes the special purpose entity limitations), or fail to observe limited liability company formalities;
(v) form, acquire other than with respect to the Equity Interests in any REO Affiliate or own any SubsidiaryEquity Securities, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets or liabilities with the assets or liabilities of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentshereunder;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue (unless otherwise contested in good faith by appropriate proceedings); provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for Person in the avoidance reasonable judgment of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to Borrower other than the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerDocuments;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Originator or any other Person;
(xiii) guaranteemake any loan or advances to any third party, become obligated forincluding any principal or Affiliate, or hold itself out to be responsible for evidence of indebtedness issued by any other Person (other than the debt of another PersonLoans, cash and Permitted Investments);
(xiv) fail either to file its own separate tax return or a consolidated federal income tax return with one or more of its Affiliates, except as may be permitted by the Code and regulations;
(xv) actively hold itself out to the public as such to represent that it is not a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business obligations of its size business and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included direct or indirect ownership interest in a consolidated financial statement of an Affiliate of the Borrower or to the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements extent it has the ability to indicate control the separateness of same, unless the Borrower from delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheettransfer;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xx) acquire the securities of its Affiliates or stockholders except for obligations or securities of any REO Affiliate or any other Subsidiary permitted hereunder;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxii) fail to use separate invoices and checks bearing its own name;
(xxvxxiii) except for any Permitted Lien relating to any Equity Security, pledge or permit the pledge of its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxiv) fail at any time to have at least one (1) independent manager Independent Manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by Director acceptable to the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance selection or replacement of the Independent Manager or Independent Director, as applicable, are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager to be removed without causeor Independent Director, as applicable);
(xxviiixxv) fail to provide in its operating agreement that the unanimous consent of all managers managers, as applicable (including the consent of the Borrower’s Independent ManagerManager or Independent Director, as applicable) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, and (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxvi) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of A▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Revolving Credit Agreement (NewStar Financial, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management acquisition and sale receipt of CollateralAssets and related assets from the Depositor under the Depositor Sale Agreement, the transfer and pledge of Collateral pursuant to the terms of Assets under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or Assets and related assets from the Depositor under the Depositor Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower Seller and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or Person, dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure or jurisdiction of formation, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organizeda Delaware statutory trust, validly existing and in good standing under the laws of the jurisdiction of its organization or formationDelaware, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, the Trust Agreement or fail to observe limited liability company statutory trust formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Concentration Account Agreement, commingle its assets with the assets of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Purchasers and the Secured Parties in connection with the Transaction Documents, except for trade payables in the ordinary course of its business; provided, that, such debt is not evidenced by a termination of all the Commitmentsnote and is paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold any evidence of indebtedness issued by any other Person (other than the Assets, cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) except as set forth in the Transaction Documents, fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersAffiliates;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;and
(xxviii) fail to provide that the unanimous consent of all managers (including the consent take or refrain from taking, as applicable, each of the Borrower’s Independent Manager) is required for activities specified in the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolventnon-consolidation opinion of Dechert LLP, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit dated as of the Borrower’s creditorsClosing Date, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of upon which the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholder;foregoing; LEGAL02/4049656702/41783784v137 LEGAL02/40496567v15 LEGAL02/41254404v5 LEGAL02/42659188v3
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other LEGAL02/4049656702/41783784v137 LEGAL02/40496567v15 LEGAL02/41254404v5 LEGAL02/42659188v3 Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;; LEGAL02/4049656702/41783784v137 LEGAL02/40496567v15 LEGAL02/41254404v5 LEGAL02/42659188v3
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Equityholder or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not not
(a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate Equityholder so long as the separateness of the Borrower from such Person the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or the Equityholder or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller Equityholder or an Affiliate), or (b) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of S▇▇▇▇▇▇ R▇▇▇ & Z▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Guardian IV BDC, L.L.C.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not done the following and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Deal Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Deal Agent;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principal or other Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance any of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash principal or other property as a capital contribution to the BorrowerAffiliates;
(xi) seek its dissolution or winding winding-up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included Person (except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, employees (if any) in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1A SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) Reserved;
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend 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;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(xxxi) (A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (aA) the Collateral or Receivables and related assets under the Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure (other than in accordance with the provisions hereofincluding through any divisional or divisive merger), without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause the Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders);
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in World Acceptance’s consolidated financial statements for Tax purposes and for consolidated reporting purposes pursuant to generally accepted accounting principles and subject to a footnote clarifying that such assets are not available to the general creditors of World Acceptance and have been pledged to Administrative Agent on behalf of Lenders;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such World Acceptance’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxxxiii) fail to pay or cause to be paid from its own funds the salaries of its own employees, if any; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate; provided that the foregoing shall not be deemed to require any capital contribution or credit support from World Acceptance or any Affiliate thereof;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearWorld Acceptance;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or;
(xxixxxx) fail to file its own Tax returns separate from those replace or appoint any Person as an Independent Manager of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is (A) who does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.satisfy the definition of an Independent Manager and
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent and each Purchaser Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawdate hereof.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) a. engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) b. acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) c. merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), d. fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementpartnershipoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) e. form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) f. commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) g. incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or h. fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) i. fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) j. enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length arms‑length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) k. seek its dissolution or winding up in whole or in part;
(xii) l. fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Transferor or any other Person;
(xiii) m. except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) n. fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) o. fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file p. [Reserved]divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) q. except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) r. fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) s. fail to pay its own liabilities and expenses only out of its own funds;
(xx) t. fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, ; u. acquire the obligations of or securities issued by its Affiliates or members;
, it being understood that this clause (xxiixxi) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is shall not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of prevent the Borrower or any of its equityholders, from acquiring Loans from the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearTransferor;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the sale of Collateral as permitted hereunder, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreementoperating agreement except as otherwise permitted pursuant to Section 5.2(h), or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) file divide or consent to permit any division of the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorsBorrower;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) other than prior to the Effective Date. (A) fail at any time to have at least one (1) independent manager or director member (the “Independent ManagerSpecial Member”) which shall be a natural Person approved by Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇S▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative LendersAdministrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager equityholders or Affiliates (other than as an Independent Manager of an Affiliate a Special Member of the Borrower that is not in the direct chain or any of ownership of the Borrower and its equityholders or Affiliates that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; provided that the Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its sole discretion upon the death, resignation or incapacitation of the current Special Member; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (aw) by reason of being the Independent Manager Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (55.00%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent ManagerSpecial Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Lawapplicable law.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of Skadden, except to Arps, Slate, Meag▇▇▇ & ▇lom ▇▇▇, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents or the AAdvantage Agreements, the Borrower has SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and AAdvantage Agreements to which it is a party and the Priority Lien Debt Documents and Junior Lien Debt Documents and (iv) such other activities as are incidental theretoto the foregoing clauses (i) through (iii);
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions and AAdvantage Agreements to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateDischarge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under clause (iiiSection 5.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments to the extent permitted in its memorandum and articles of association and the Loan Documents (it being understood that each SPV Party shall only be permitted to form and thereafter own one or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan more Subsidiaries that are each SPV Parties or any exchange offer, work-out or restructuring of a Loan) without the prior written consent will become SPV Parties upon satisfaction of the Administrative Agentrequirements set forth in clauses (4), (5) and (6) of the proviso in the definition of “Permitted Loyalty Subsidiary” within the time periods set forth in Section 5.17(l));
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and (iv) ordinary course contingent obligations under or any terms thereof related to the AAdvantage Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) AAdvantage Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and American and/or its Subsidiaries substantially consistent with American’s arrangements with its other Subsidiaries that (I) terminate upon such SPV Party ceasing to be a Subsidiary of American, (II) do not involve the payment of cash to or from such SPV Party, (III) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bIV) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Agreement, (v) intercompany loans from Loyalty Co to American permitted under Section 6.01, or (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (iy) acquisitions of Collateral from contain non-petition covenants with respect to such SPV Party consistent with the Seller, and sales of Collateral to the Seller and its Affiliates, each provisions set forth in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (iiz) contain nonrecourse covenants with respect to such SPV Party consistent with the Equityholder may contribute cash or other property as a capital contribution to the Borrowerprovisions set forth in this Agreement;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of any SPV Party, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except pursuant to the Transaction Documents and AAdvantage Agreements, the Priority Lien Debt Documents and the Junior Lien Debt Documents, guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents or AAdvantage Agreements));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents and AAdvantage Agreements), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager its Affiliates so long as (or parent company) provided that (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to pay maintain, hire or employ any individuals as employees; provided that the salaries of its own employees, if anySPV Parties are not prohibited or limited in any manner from having directors and officers;
(xxit) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party, (ii) Madrid SPV or in connection with implementation of the Madrid Protocol Holding Structure or an Alternative Madrid Structure or (iii) intercompany loans permitted under Section 6.01);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson other than pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxviw) fail at any time to have at least one (1) independent manager or director (satisfy the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years requirements of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearSection 5.09;
(xxviix) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxixy) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for Tax U.S. federal and applicable state and local income tax purposes and is not or except as otherwise required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawby law.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (American Airlines, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateeach Lender;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agenteach Lender;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer's normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its any principal or Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securitiesPermitted Investments);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; providedPerson (for the avoidance of doubt, however, that the Borrower’s assets may be included except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s 's creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Closing Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date), terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) except for the Capital Contribution Agreement, enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the BorrowerSeller, CS Funding VII, the Seller Originator and CapitalSource Finance LLC or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the Third Amendment and Restatement Effective Date, permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes Third Amendment and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawRestatement Effective Date.
Appears in 1 contract
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2017-1A SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent and each Purchaser Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent and each Purchaser Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent and each Purchaser Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent and each Purchaser Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) Servicer or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirector) is required for the Borrower Seller to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawdate hereof.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate the provisions of its operating agreement other than in accordance with the terms thereof, or fail to comply with the provisions of its limited liability company agreement, operating agreement or otherwise fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person, other than as expressly provided in the Transaction Documents;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iic) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the BorrowerTransaction Documents;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller BDC or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate BDC so long as the separateness of the Borrower from such Person the BDC and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the BDC are disclosed by the BDC within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetconsolidated financial statements;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
(xxivxxiii) fail to use separate invoices and checks bearing its own name;
(xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvixxv) (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller BDC or an Affiliate), or (ii) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without causethe Borrower LLC Agreement;
(xxviiixxvi) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and
(axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Finance Corp)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents or the SkyMiles Agreements, the Borrower has SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and SkyMiles Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions and SkyMiles Agreements to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateDischarge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under clause (iiiSection 5.07(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock to the extent permitted in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agentits memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash any other Priority Lien Debt,
(iii) any Junior Lien Debt and (iv) ordinary course contingent obligations under or other property as a capital contribution any terms thereof related to the Borrower;
SkyMiles Agreements (xi) seek its dissolution or winding up in whole or in part;
(xii) fail such as customary indemnities to correct any known misunderstandings regarding the separate identities of the Borrowerfronting banks, the Seller or any other Person;
(xiii) guaranteeadministrative agents, become obligated forcollateral agents, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its businessdepository banks, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting businessescrow agents, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliatesetc.);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (Delta Air Lines, Inc.)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents, the Borrower IPB has not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall IPB purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall IPB acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower IPB and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Termination Date;
(ivd) except as otherwise permitted under clause (iiiSection 5.07(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock to the extent permitted in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agentits memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and (iv) ordinary course contingent obligations under or any terms thereof related to the MileagePlus Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents and (biii) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt Person and (y) contain non-recourse and non-petition covenants with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral respect to the Seller and its Affiliates, each IPB consistent with the provisions set forth in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerAgreement;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of IPB, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except pursuant to the Transaction Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents), 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;
(xvi) 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, or make an assignment for the benefit of creditors;
(xviip) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (ai) any of its principals or Affiliates, (bii) any Affiliate of a principal or (ciii) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the BorrowerIPB’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager its Affiliates so long as (or parent company) provided that (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower IPB from such Person and to indicate that the BorrowerIPB’s assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the BorrowerIPB’s own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to pay the salaries of its own maintain, hire or employ any individuals as employees, if any;
(xxit) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than, Madrid SPV or in connection with implementation of the Madrid Protocol Holding Structure or an Alternative Madrid Protocol Structure);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson other than pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxviw) fail at any time for seven (7) consecutive Business Days to have at least one two (12) independent manager or director directors (the each, an “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who either is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative AgentAgent or is provided by a company nationally recognized in the United States or the Cayman Islands providing professional independent managers, in each case that is not an Affiliate of the Borrower, the Seller any Loan Party or the Master Collateral Manager Agent and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager independent manager and is not, and has never been, and will not while serving as Independent Manager independent manager be, any of the following: (ai) a member, partner, equityholder, manager, director, officer or employee of the Borrower IPB or any of its equityholders, the Master Collateral Manager Agent or any Affiliates of the foregoing (other than as an Independent Manager of an the Company, the Aggregator Entities or any other Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and IPB that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager either is approved by the Administrative Agent or is employed by a company that routinely provides professional Independent Managers or directors); (bii) a creditor, supplier or service provider (including provider of professional services) to the BorrowerIPB, the Master Collateral Manager Agent or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the BorrowerIPB, the Master Collateral Manager Agent or any of its equityholders or Affiliates in the ordinary course of business); (ciii) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (div) a Person that controls (whether directly, indirectly or otherwise) any of clause (ai), (bii) or (ciii) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (ai) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower IPB shall be qualified to serve as an Independent Manager of the Borrower, IPB; provided that any director who is an employee of Walkers Fiduciary Limited shall be deemed to meet the fees that such individual earns from serving as requirements of an “Independent Manager Manager” for purposes of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearthis definition;
(xxviix) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the BorrowerIPB, (ev) make any general assignment for the benefit of the BorrowerIPB’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxixy) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower IPB is treated as a “disregarded entity” entity for Tax purposes U.S. federal and is not required to file Tax returns under Applicable Law, applicable state and pay any Taxes required to be paid under Applicable Lawlocal income tax purposes.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (United Airlines, Inc.)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:
(i) past): engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) ; acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholder;
(iii) foregoing; merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative AgentRequired Lenders); elect for the Borrower to be treated, or except otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), a corporation for U.S. federal income tax purposes; fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(v) form, acquire or ; own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
Agent (vi) acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust; commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) , except to the extent contemplated by this Agreement; incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment 111 DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>>/<<NUM>>v<<VER>> \* MERGEFORMAT LEGAL02/46534623v2 of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) paid when due; become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) ; fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) ; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes; seek its dissolution or winding up, in whole or in part; enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) ; fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiii) ; guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
; make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (xiv) other than Permitted Investments and Contracts); fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) ; fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) ; 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, ; hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
; 112 DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>>/<<NUM>>v<<VER>> \* MERGEFORMAT LEGAL02/46534623v2 permit any transfer (xviiiwhether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion; fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) reporting purposes; fail to pay its own liabilities and expenses only out of its own funds;
(xx) ; fail to pay or cause to be paid the salaries of its own employees, if any;
(xxi) except applicable, in connection with any exchange offer, work-out, restructuring or the exercise light of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, its contemplated business operations; acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) stockholders; fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) ; fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, ; pledge its assets to secure for the obligations benefit of any other Person;
(xxvi) , other than with respect to payment of the Indebtedness to the Secured Parties hereunder; fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the EquityholderRegional Management; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or
, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (xxix) fail except with respect to file its own Tax returns separate from those of any other Person, except decisions as to the extent selection of an Independent Manager to fill such vacancy); replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender 113 DOCPROPERTY DOCXDOCID DMS=IManage Format=<<LIB>>/<<NUM>>v<<VER>> \* MERGEFORMAT LEGAL02/46534623v2 and without an Officer’s Certificate of Regional Management that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.prospective Independent Manager satisfies the definition of an Independent Manager;
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock any Equity Security received in Obligors exchange for a defaulted Loan or portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanObligor thereof), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) Indebtedness incurred under the terms of the Transaction Documents, (ii) with respect to any Revolving Loan or Delayed Draw Loan owned by the Secured Parties hereunder or Borrower, obligations to fund under the terms of the Underlying Instruments and (iii) Indebtedness in conjunction with a repayment of all Advances owed to the Lenders Obligations and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) contracts and agreements on customary terms relating to the acquisition, origination and disposition of the Collateral, (c) the Underlying Instruments, and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Transferor or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s 's assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s 's assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s 's own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations of or securities issued by its Affiliates or members, it being understood that this clause (xxi) shall not prevent the Borrower from acquiring Loans from the Transferor;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvi) (A) fail at any time to have at least one (1) independent manager or director member (the “Independent Manager”"Special Member") which shall be a natural Person approved by Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent directora Special Member, independent manager or independent member with at least three years of employment experience and who is provided by Citadel SPV, CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (aw) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager their respective equityholders or Affiliates (other than as an Independent Manager a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (aw), (bx) or (cy) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member during the Covenant Compliance Period shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph clause (aw) above by reason of being the Independent Manager Special Member of a “"special purpose entity” " affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, Borrower provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s 's annual income for that year; provided, further, that Borrower shall have ten (10) Business Days to replace any Special Member with a person approved by Administrative Agent in its reasonable discretion upon the death, resignation or incapacitation of the current Special Member;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent Manager's Special Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s 's creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid by it under Applicable Lawapplicable law.
Appears in 1 contract
Sources: Loan, Security and Servicing Agreement (Monroe Capital Income Plus Corp)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and related assets under the Second Tier Purchase 105 LEGAL02/42338653v2 Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Receivables and related assets under the Second Tier Purchase Agreement, (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2021-1C SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitmentspaid when due;
(viiiix) become insolvent not Solvent or generally fail to pay its debts and liabilities from its assets as the same shall become due;
(ixx) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part; 106 LEGAL02/42338653v2
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;; 107 LEGAL02/42338653v2
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated prospective Independent Manager satisfies the definition of an Independent Manager; and 108 LEGAL02/42338653v2
(xxxii) not take or refrain from taking, as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Lawapplicable, and pay any Taxes required to be paid under Applicable Laweach of the activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ & Bird, LLP, dated the Closing Date, upon which the conclusions expressed therein are based.
Appears in 1 contract
Special Purpose Entity. At all times prior to Until the Collection DateDebt has been paid in full, the Borrower has not hereby represents, warrants and covenants that it is and shall not:
(i) engage in any business continue to be a Special Purpose Entity. A “Special Purpose Entity” means a corporation, limited liability company or activity other than the purchasepartnership, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than which (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower does not have and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) will not incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness than, with respect to Borrower and, if Borrower is a partnership, each of its Special Purpose Entity general partners, the following: (i) the Debt, (ii) trade payables and capital expenditures incurred in the ordinary course of the business of owning and operating the Property, provided that such trade payables and capital expenditures (A) shall not be evidenced by a note, (B) shall be paid within sixty (60) days of the date incurred and (C) shall not exceed, in the aggregate, three percent (3%) of the outstanding principal balance of the Loan at any one time, (iii) real estate taxes and assessments, and (iv) obligations under equipment leases and purchase money financing arrangements entered into in connection with the leasing or purchase of equipment reasonably required in connection with the ownership and operation of the Property, provided that the sum of the purchase price (or in the case of leased equipment, the amount that would have been paid in order to purchase, instead of lease) for such equipment shall not exceed, in the aggregate, one percent (1%) of the outstanding principal balance of the Loan at any one time; (b) if such entity is a limited liability company, has as its manager or managing member a Special Purpose Entity that owns at least one half percent (.50%) of the membership interests of the limited liability company; (c) if such entity is a partnership, has a general partner of such entity that is a Special Purpose Entity that owns at least one percent (1.0%) of the partnership interests in such partnership, (d) has Charter Documents that provide that such entity will not: (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets or the assets of any entity in which it has a direct or indirect interest, except as otherwise provided in the Loan Documents; (3) engage in any other business activity, or amend its organizational documents with respect to the Secured Parties hereunder matters set forth in this Section 4.2 without the consent of the Lender; or in conjunction with a repayment (4) without the affirmative vote of all Advances owed of the directors of the corporation or directors or managers of a limited liability company (that is such entity, the managing member or a general partner of such entity), file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest; and (e) at all times from and after June 30, 1997 (and to B▇▇▇▇▇▇▇’s knowledge with respect to the Lenders representations in clauses (i), (ii) and (iii) below, from and after the date of its inception):
(i) has been, and continuing from and after the date hereof shall remain, organized solely for the purpose of (i) acquiring, developing, owning, holding, selling, leasing, transferring, exchanging, managing and operating the Property, obtaining the Loan from Lender and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing; (ii) acting as a termination general partner of the partnership that owns the Property; or (iii) acting as a managing member of the general partners of the partnership that owns the Property;
(ii) has not engaged in, and continuing from and after the date hereof shall not engage in, any business or activity unrelated to (i) the acquisition, development, ownership, management or operation of the Property, (ii) acting as a member and or manager of the limited liability company that is a general partner of the partnership that owns the Property; or (iii) acting as a general partner of the partnership that owns the Property;
(iii) has not owned, and continuing from and after the date hereof shall not own, any material assets other than (i) the Property, (ii) such incidental Personal Property as may be necessary for the operation of the Property, (iii) the membership interest in the limited liability company that is a general partner of the partnership that owns the Property; or (iv) the general partnership interest in the partnership that owns the Property;
(iv) has not engaged in, sought or consented to, and continuing from and after the date hereof shall not engage in, seek or consent to, any dissolution, winding up, liquidation, consolidation, merger, or sale of all or substantially all of its assets, or transfer of its partnership or membership interests, or any stock or beneficial ownership of, any entity, except as permitted under Section 8 of this agreement;
(v) has preserved, and continuing from and after the Commitmentsdate hereof will preserve, its existence as an entity duly organized and validly existing under the laws of the jurisdiction of its organization or formation and will not without the prior written consent of Lender, amend, modify, terminate or fail to comply with the provisions of its operating agreement, articles of formation, partnership agreement or certificate of partnership, certificate of incorporation, by-laws or similar organizational documents, as the case may be (collectively, the “Charter Documents”), or consent to or suffer the amendment, modification, termination or breach of any of the Charter Documents, or amend, modify, terminate or fail to comply with, or consent or suffer the amendment, modification, termination or breach of any Charter Documents of any entity in which it owns an interest, in each case in such a manner as could reasonably jeopardize Borrower’s status as a bankruptcy remote entity;
(vi) has not owned, and continuing from and after the date hereof, shall not own or make any investment in, any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof or any fiduciary acting in such capacity on behalf of any of the foregoing (each, a “Person”) other than Borrower or a Special Purpose Entity owning an interest in Borrower;
(vii) has not commingled, and from and after the date hereof, shall not commingle its assets with the assets of any of its general partners, managing members, shareholders, Affiliates, principals or of any other person or entity;
(viii) become insolvent or fail has maintained, and from and after the date hereof shall maintain, its financial statements, accounting records, bank accounts and other entity documents separate and apart from those of the partners, members, shareholders, principals and Affiliates of such entity, and has not permitted and will not permit its assets to be listed as assets on the financial statement of any other entity except that such entity’s financial position, assets, results of operations and cash flows may be included in the consolidated financial statements of an Affiliate of such entity; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay its the debts and liabilities from its assets as of the same shall become dueconsolidated entity nor constitute obligations of the consolidated entity;
(ix) fail has not entered into or been a party to, and from and after the date hereof, will not enter into or be a party to maintain any contract or agreement with any general partner, managing member, shareholder, principal or Affiliate of B▇▇▇▇▇▇▇, Guarantor or Indemnitor, or any general partner, managing member, shareholder, principal or Affiliate thereof, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available in a comparable arms-length basis with third parties;
(x) has maintained, and from and after the date hereof shall maintain, its recordsassets in such a manner that it will not be costly or difficult to segregate, books of account and bank accounts separate and apart ascertain or identify its individual assets from those of any other Person;
(xxi) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Sellerhas not made, and sales of Collateral from and after the date hereof shall not make any loans to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in partany third party;
(xii) fail to correct any known misunderstandings regarding has held itself out and identified itself, and from and after the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or date hereof shall hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out and identify itself, to the public as a legal entity separate and distinct from any other Person or to conduct Person;
(xiii) has conducted, and from and after the date hereof shall conduct, its business, including all oral and written communications business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it such entity is responsible for the debts of any third party (including any general partner, managing member, shareholder, principal or Affiliate of such entity, but not including any Special Purpose Entity limited partnership of which such entity is expressly permitted to be a general partner in accordance with the terms hereof);
(xiv) has remained, and from and after the date hereof intends to remain, solvent and which pay its principals debt and liabilities (including, as applicable, shared personnel and overhead expenses) from the revenue generated from the operation of the Property, provided that the foregoing covenant shall not require the general partners, shareholders or Affiliates)members, as the case may be, of such Special Purpose Entity to make any additional capital contributions to such Special Purpose Entity;
(xv) fail has maintained, and from and after the date hereof, will maintain, to maintain the extent available from the cash flow generated from the operation of the Property, adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations ;
(xvi) has filed, and from and after the date hereof, will file or consent its own tax returns, if any, as may be required under applicable law, to the extent such entity is (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division solely for tax purposes of another taxpayer, and has paid and will pay any petition, either voluntary or involuntary, taxes so required to take advantage of any be paid under applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditorslaw;
(xvii) except as may be required or permitted by has allocated, and from and after the Code and regulations or other applicable state or local tax lawdate hereof, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to will allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxviii) fail has not failed, and from and after the date hereof shall not fail, to use correct any known misunderstanding regarding the separate invoices identity of such entity;
(xix) has held, and checks bearing from and after the date hereof shall hold, its assets in its own name and has conducted and will conduct its business in its own name;
(xx) has paid, and from and after the date hereof shall pay, its own liabilities and expenses;
(xxi) has observed, and from and after the date hereof shall observe, all corporate, limited liability company or partnership formalities, as applicable;
(xxii) has not assumed, guaranteed or become obligated for, and from and after the date hereof shall not assume or guarantee or become obligated for, the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except by virtue of its status as a Special Purpose Entity general partner of a Special Purpose Entity partnership that has been approved by Lender;
(xxiii) has not acquired, and from and after the date hereof, will not acquire obligations or securities of its partners, members or shareholders or any other Affiliate;
(xxiv) has maintained and used, and from and after the date hereof will maintain and use, separate stationery, invoices and checks bearing its name;
(xxv) except for any Permitted Lien relating to any Equity Securityhas not pledged, pledge and from and after the date hereof shall not pledge, its assets to secure for the obligations benefit of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesshad, and which individual is duly appointed as an Independent Manager from and is not, and has never been, and after the date hereof will not while serving as Independent Manager behave, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or its obligations guaranteed by any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote such entity, provided that such Independent Manager except as is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates contemplated in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearthis agreement;
(xxvii) fail to ensure that has complied, and from and after the date hereof will comply, with all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholdermaterial terms and provisions contained in its Charter Documents; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;and
(xxviii) fail to provide that has conducted and operated, and from and after the unanimous consent date hereof shall conduct and operate, its business as presently conducted and operated and in compliance with the requirements of all managers (including its Charter Documents. Notwithstanding the consent foregoing, the following operations and activities of Borrower and its Affiliates shall not be considered a violation of the Borrowercovenants contained in this Section 4.2:
1. offering services to residents of the Property through Affiliates of Borrower or other third parties for which fees and charges may be collected by Borrower or the Affiliate and paid to such Affiliate or third party, which may include, without limitation, cable and internet services, landscaping, snow removal, lease or sale of manufactured homes, and child care; provided that such Affiliates do not conduct their business in the name of Borrower and that any agreements between Borrower and its Affiliates relating to such services are on commercially reasonable terms similar to those of an arm’s Independent Manager) is required length transaction;
2. depositing all gross revenue, whether cash, cash equivalents or similar assets, in an operating account maintained specifically for the Property (a “Property Operating Account”), after paying expenses of Borrower or causing SCOLP and/or Sponsor, to (a) institute proceedings pay such expenses, and distributing such remaining cash to be adjudicated bankrupt Sponsor, SCOLP, or insolventat the direction of Sponsor or SCOLP, (b) institute or consent as applicable, to any other Affiliate of Borrower, and in any case, distributing such remaining cash that does not belong to the institution Borrower promptly to such entities;
3. paying all payables, debts and other liabilities arising from or in connection with the operation of bankruptcy the Property from the Property Operating Account, or insolvency proceedings against itcausing SCOLP and/or Sponsor to pay such liabilities;
4. using ancillary assets in connection with the operation of the Property held in the name of Sponsor, (c) file a petition seeking SCOLP, or consent any of their Affiliates, such as vehicles and office and maintenance equipment;
5. treating the Property for all purposes as part of and within the portfolio of manufactured housing communities owned by SCOLP or its Affiliates, for marketing, promotion and providing information and reports to reorganization the public or relief under as required by any applicable federal or state law relating to bankruptcy or insolvencylaw; provided, (d) seek or consent to the appointment of a receiverhowever, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit that Borrower shall conduct business in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those name or its assumed or trade name; and/or
6. allocating general overhead and administrative costs incurred by Sponsor and SCOLP and/or other Affiliates of any other Person, except to the extent that the Borrower is treated as in a “disregarded entity” for Tax purposes fair and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawequitable manner.
Appears in 1 contract
Sources: Mortgage and Security Agreement (Sun Communities Inc)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents or the Mileage Plan Agreements, the Borrower has SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and Mileage Plan Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions and Mileage Plan Agreements to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Indenture (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateDischarge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under clause (iiiSection 4.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments to the extent permitted in its memorandum and articles of association and the Notes Documents (it being understood that each SPV Party shall only be permitted to form and thereafter own one or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan more Subsidiaries that are SPV Parties or any exchange offer, work-out or restructuring of a Loan) without the prior written consent will become SPV Parties upon satisfaction of the Administrative Agentrequirements set forth in clause (3), (4) and (5) of the proviso in the definition of “Permitted Loyalty Subsidiary” within the time periods set forth in Section 4.16(l));
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Senior Secured Parties hereunder under this Indenture (including Additional Notes) or in conjunction with a repayment repurchase or redemption of all Advances or a portion of the Notes owed to the Lenders Holders, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and a termination of all (iv) ordinary course contingent obligations under or any terms thereof related to the CommitmentsMileage Plan Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) Mileage Plan Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and Alaska and/or its Subsidiaries substantially consistent with Alaska’s arrangements with its other Subsidiaries that (w) terminate upon such SPV Party ceasing to be a Subsidiary of Alaska, (x) do not involve the payment of cash to or from such SPV Party, (y) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bz) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture, (v) intercompany agreements for loans from Loyalty Co to Alaska permitted under Section 4.22, and (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (iy) acquisitions of Collateral from contain non-petition covenants with respect to such SPV Party consistent with the Seller, and sales of Collateral to the Seller and its Affiliates, each provisions set forth in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Indenture and (iiz) contain non-recourse covenants with respect to such SPV Party consistent with the Equityholder may contribute cash or other property as a capital contribution to the Borrower;provisions set forth in this Indenture.
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of any SPV Party, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except pursuant to the Transaction Documents, the Mileage Plan Agreements, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents or the Mileage Plan Agreements));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents and the Mileage Plan Agreements), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, which may be unaudited, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager its Affiliates so long as (or parent company) provided that (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to pay maintain, hire or employ any individuals as employees; provided that the salaries of its own employees, if anySPV Parties are not prohibited or limited in any manner from having directors and officers;
(xxit) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party or (ii) intercompany loans permitted under Section 4.22);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson other than pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxviw) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve Directors as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearare required pursuant Section 4.09;
(xxviix) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization reorganization, restructuring, liquidation (including provisional liquidation), winding up or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, restructuring officer, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxixy) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for Tax purposes U.S. federal and is not required to file Tax returns under Applicable Law, applicable state and pay any Taxes required to be paid under Applicable Lawlocal income tax purposes.
Appears in 1 contract
Sources: Indenture (Alaska Air Group, Inc.)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents or the AAdvantage Agreements, the Borrower has SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and AAdvantage Agreements to which it is a party and the Priority Lien Debt Documents and Junior Lien Debt Documents and (iv) such other activities as are incidental theretoto the foregoing clauses (i) through (iii);
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions and AAdvantage Agreements to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Agreement (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structurestructure (except in connection with a Permitted SPV Reorganization), or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateDischarge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under clause (iiiSection 5.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments to the extent permitted in its memorandum and articles of association and the Loan Documents (it being understood that each SPV Party shall only be permitted to form and thereafter own one or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan more Subsidiaries that are each SPV Parties or any exchange offer, work-out or restructuring of a Loan) without the prior written consent will become SPV Parties upon satisfaction of the Administrative Agentrequirements set forth in clauses (4), (5) and (6) of the proviso in the definition of “Permitted Loyalty Subsidiary” within the time periods set forth in Section 5.17(l));
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances or a portion of the Term Loans owed to the Lenders and a termination of all the Term Loan Commitments, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and (iv) ordinary course contingent obligations under or any terms thereof related to the AAdvantage Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) AAdvantage Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and American and/or its Subsidiaries substantially consistent with American’s arrangements with its other Subsidiaries that (I) terminate upon such SPV Party ceasing to be a Subsidiary of American, (II) do not involve the payment of cash to or from such SPV Party, (III) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bIV) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Agreement, (v) intercompany loans from Loyalty Co to American permitted under Section 6.01, or (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (iy) acquisitions of Collateral from contain non-petition covenants with respect to such SPV Party consistent with the Seller, and sales of Collateral to the Seller and its Affiliates, each provisions set forth in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (iiz) contain nonrecourse covenants with respect to such SPV Party consistent with the Equityholder may contribute cash or other property as a capital contribution to the Borrowerprovisions set forth in this Agreement;
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of any SPV Party, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except pursuant to the Transaction Documents and AAdvantage Agreements, the Priority Lien Debt Documents and the Junior Lien Debt Documents, guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents or AAdvantage Agreements));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents and AAdvantage Agreements), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager its Affiliates so long as (or parent company) provided that (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to pay maintain, hire or employ any individuals as employees; provided that the salaries of its own employees, if anySPV Parties are not prohibited or limited in any manner from having directors and officers;
(xxit) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party, (ii) Madrid SPV or in connection with implementation of the Madrid Protocol Holding Structure or an Alternative Madrid Structure or (iii) intercompany loans permitted under Section 6.01);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson other than pursuant to the Loan Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxviw) fail at any time to have at least one (1) independent manager or director (satisfy the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years requirements of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearSection 5.09;
(xxviix) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxixy) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for Tax U.S. federal and applicable state and local income tax purposes and is not or except as otherwise required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawby law.
Appears in 1 contract
Sources: Term Loan Credit and Guaranty Agreement (American Airlines, Inc.)
Special Purpose Entity. At all times prior to Other than as required or permitted by the Collection DateTransaction Documents or the SkyMiles Agreements, the Borrower has SPV Parties have not and shall not:
(ia) engage in any business or activity other than (i) the purchase, receipt, management and sale of CollateralCollateral and Excluded Property; provided that in no event shall any SPV Party purchase, receive, manage or sell real property, (ii) the transfer and pledge of Collateral pursuant to the terms of the Transaction Collateral Documents and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (iii) the entry into and the performance under the Transaction Documents and SkyMiles Agreements to which it is a party and (iv) such other activities as are incidental thereto;
(iib) acquire or own any material assets other than (ai) the Collateral and Excluded Property; provided that in no event shall any SPV Party acquire or own real property, or (bii) incidental property as may be necessary or desirable for the operation of the Borrower any SPV Party and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions and SkyMiles Agreements to which it may receive from is a party and the EquityholderPriority Lien Debt Documents and the Junior Lien Debt Documents;
(iiic) except as permitted by this Indenture (i) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agentassets, or except as permitted by this Agreement, (ii) change its legal structure, or jurisdiction of formationincorporation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateDischarge of Senior Secured Debt Obligations;
(ivd) except as otherwise permitted under clause (iiiSection 4.08(c), fail to preserve its existence as an entity duly organizedincorporated, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesincorporation;
(ve) form, acquire or own any Subsidiary, own any Capital Stock Equity Interests in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock to the extent permitted in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agentits memorandum and articles;
(vif) except as contemplated in the Senior Secured Debt Documents, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(viig) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), Indebtedness other than (i) Indebtedness to the Senior Secured Parties hereunder under this Indenture or in conjunction with a repayment repurchase or redemption of all Advances or a portion of the Notes owed to the Lenders Holders, (ii) any other Priority Lien Debt, (iii) any Junior Lien Debt and a termination of all (iv) ordinary course contingent obligations under or any terms thereof related to the CommitmentsSkyMiles Agreements (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.);
(viiih) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue in the ordinary course of business;
(ixi) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xj) enter into any contract or agreement with any Person, except (ai) the Transaction Documents to which it is a party and the Priority Lien Debt Documents and the Junior Lien Debt Documents, (ii) organizational documents, (iii) SkyMiles Agreements or other co-branding, partnering or similar agreements, (iv) agreements between any SPV Party and Delta and/or its Subsidiaries substantially consistent with Delta’s arrangements with its other Subsidiaries that (w) terminate upon such SPV Party ceasing to be a Subsidiary of Delta, (x) do not involve the payment of cash to or from such SPV Party, (y) are entered into for the primary purpose of managing the transfer and processing of data among the parties thereto and (bz) contain non-petition and nonrecourse covenants with respect to such SPV Party consistent with the provisions set forth in this Indenture, (v) intercompany agreements for loans from Loyalty Co to Delta permitted under Section 4.22, and (vi) other contracts or agreements that (x) are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (iy) acquisitions of Collateral from contain non-petition covenants with respect to such SPV Party consistent with the Seller, and sales of Collateral to the Seller and its Affiliates, each provisions set forth in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Indenture and (iiz) contain non-recourse covenants with respect to such SPV Party consistent with the Equityholder may contribute cash or other property as a capital contribution to the Borrower;provisions set forth in this Indenture.
(xik) seek its dissolution or winding up in whole or in part;
(xiil) fail to use commercially reasonable efforts to correct promptly any material known misunderstandings regarding the separate identities of any SPV Party, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiim) except pursuant to the Transaction Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents guarantee, become obligated for, or hold itself out to be responsible for the debt Indebtedness of another Person;
(xivn) fail fail, in any material respect, either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it is responsible for the debts Indebtedness of any third party (including any of its principals or AffiliatesAffiliates (other than as contemplated or required pursuant to the Transaction Documents));
(xvo) fail fail, to the extent of its own funds (taking into account the requirements in the Transaction Documents), 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;
(xvip) 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, or make an assignment for the benefit of creditors[reserved];
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiiq) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, provided that the Borrower’s SPV Parties’ assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager its Affiliates so long as (or parent company) provided that (ai) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower SPV Parties from such Person and to indicate that the Borrower’s SPV Parties’ assets and credit are not available to satisfy the debts Indebtedness and other obligations of such Person or any other Person except for Indebtedness incurred and other obligations pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents and (bii) such assets shall also be listed on the Borrower’s SPV Parties’ own separate balance sheetsheet (in each case, subject to clause (y) below);
(xixr) fail to pay its own separate liabilities and expenses only out of its own fundsfunds (other than as contemplated under any Director Services Agreement);
(xxs) fail to pay the salaries of its own maintain, hire or employ any individuals as employees, if any;
(xxit) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (other than (i) any equity interests of another SPV Party that is a Subsidiary of such SPV Party or (ii) intercompany loans permitted under Section 4.22);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiiu) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other PersonPerson other than pursuant to the Notes Documents, the Priority Lien Debt Documents and the Junior Lien Debt Documents;
(xxviw) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve Directors as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearare required pursuant Section 4.09;
(xxviix) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (ai) institute proceedings to be adjudicated bankrupt or insolvent, (bii) institute or consent to the institution of bankruptcy bankruptcy, winding up or insolvency proceedings against it, (ciii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (div) seek or consent to the appointment of a receiver, liquidator, provisional liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrowerany SPV Party, (ev) make any general assignment for the benefit of the Borrowerany SPV Party’s creditors, (fvi) admit in writing its inability to pay its debts generally as they become due, or (gvii) take any corporate action in furtherance of to approve any of the foregoing; or
(xxixy) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower any SPV Party is treated as a “disregarded entity” entity for Tax purposes U.S. federal and is not required to file Tax returns under Applicable Law, applicable state and pay any Taxes required to be paid under Applicable Lawlocal income tax purposes.
Appears in 1 contract
Sources: Indenture (Delta Air Lines, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement and (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of Seller and the Borrower, the Seller Originator or any principal or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of P▇▇▇▇▇ B▇▇▇▇ LLP, except to the extent that the Borrower is treated dated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable LawSeptember 10, and pay any Taxes required to be paid under Applicable Law2007.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;; [Investcorp] Loan and Security Agreement
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock equity interest in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan)entity, or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Related Fund or any other Person;
(xiii) except as provided in this Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;; [Investcorp] Loan and Security Agreement
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an its Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person Affiliate or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Personperson, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person;, other than with respect to payment of the indebtedness to the Secured Parties hereunder; [Investcorp] Loan and Security Agreement
(xxvi) (A) fail at any time to have at least one (1) independent manager or director member (the “Independent ManagerSpecial Member”) which shall be a natural Person approved by the Administrative Agent in its sole discretion, which member must, in each such instance, be a Person who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, Global Securitization Services, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services Corporation or, if none of those companies is then providing professional Independent ManagersSpecial Members, another nationally recognized company reasonably approved by the Administrative AgentLenders, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager Borrower and that provides professional Independent Managers Special Members and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager a Special Member and is not, and has never been, and will not while serving as Independent Manager Special Member be, any of the following: (av) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager respective equityholders or Affiliates (other than as an Independent Manager a Special Member of the Borrower or an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-bankruptcy remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (bx) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers Special Members and other corporate services to the Borrower, the Collateral Manager Borrower or any of its equityholders or Affiliates in the ordinary course of business); (cy) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (dz) a Person that controls (whether directly, indirectly or otherwise) any of (av), (bx) or (cy) above; or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Special Member shall require the written consent of the Administrative Agent. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (av) by reason of being the Independent Manager Special Member of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager a Special Member of the Borrower, provided that the fees that such individual earns from serving as Independent Manager Special Member of Affiliates affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers members (including the consent of the Borrower’s Independent ManagerSpecial Member) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxviii) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax tax purposes and is not required to file Tax tax returns under Applicable Lawapplicable law, and pay any Taxes taxes required to be paid under Applicable Law.applicable law. [Investcorp] Loan and Security Agreement
Appears in 1 contract
Sources: Loan, Security and Collateral Management Agreement (Investcorp Credit Management BDC, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower The Seller has not and shall not:
(i) engage in any business or activity other than the purchasepurchase and receipt of Collateral and related assets from the Originator under the Sale Agreement, receipt, management and the sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents ownership of Capital Stock of 2007-A/LLC and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral or and related assets from the Originator under the Sale Agreement, (b) the Capital Stock of 2007-A/LLC and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderSeller;
(iii) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the New Effective Date, merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the New Effective Date), terminate or fail to comply with the provisions of its limited liability company operating agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiaryexcept for 2007-A/LLC, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) except as permitted by this Agreement and the Lock-Box Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) except for the Capital Contribution Agreement, incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders Purchasers, except for trade payables in the ordinary course of its business; provided that such debt is not evidenced by a note and a termination of all the Commitmentsis paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) except for the Capital Contribution Agreement, enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the BorrowerSeller, the Seller New Parent and the Originator or any principal or Affiliate thereof or any other Person;
(xiii) except for the Capital Contribution Agreement, guarantee, become obligated for, or hold itself out to be responsible for the debt indebtedness of another Person;
(xiv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail to file its own separate tax return, or file a consolidated federal income tax return with any other Person, except as may be required by the Internal Revenue Code and regulations;
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts indebtedness of any third party (including any of its principals or Affiliates);
(xvxvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixviii) 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, or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Internal Revenue Code and regulations regulations, share any common logo with or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliatesaffiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixx) except in connection with the 2009 Restructuring and solely to the extent effectuated prior to the New Effective Date, permit any transfer (whether in one or more transactions) of any direct or indirect ownership interest in the Seller to the extent it has the ability to control the same, unless the Seller delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such transfer;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xixxxii) fail to pay its own liabilities and expenses only out of its own fundsfunds or out of funds received by it in connection with its ownership of Capital Stock in 2007-A/LLC;
(xxxxiii) fail to pay the salaries of its own employees, if anyemployees in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders (other than 2007-A/LLC) ;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder and other than pursuant to the Capital Contribution Agreement;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not and has prior experience as an independent director, independent manager or independent member with not been for at least three five years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditortrade credit or shareholder (or spouse, supplier parent, sibling or service provider; or (dchild of the foregoing) a Person that controls (whether directly, indirectly or otherwise) any of (a)) the Servicer, (b) or the Seller, (c) above. A natural person who otherwise satisfies any principal of the foregoing definition and satisfies subparagraph Servicer, (ad) by reason any Affiliate of being the Servicer, or (e) any Affiliate of any principal of the Servicer (an “Independent Manager Director”); provided that such Independent Director may be an independent director of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Servicer or its Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) or fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager Director are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of directors (including the Independent Manager to be removed without causeDirector);
(xxviiixxix) fail to provide that take any of the following actions without obtaining the prior unanimous consent of all managers directors (including the consent of the Borrower’s Independent Manager) is required for the Borrower to Director): (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSeller, (e) make any assignment for the benefit of the BorrowerSeller’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxx) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of ▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawNew Effective Date.
Appears in 1 contract
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
: BUSINESS.33662032.9 109 (i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
; (iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
; (v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
; (vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Transaction Documents; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
Transaction Documents; (xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities of the Borrower, the Seller or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxiv) fail to use separate invoices and checks bearing its own name;
(xxv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;
(xxvi) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Guardian IV BDC, L.L.C.)
Special Purpose Entity. At all times prior to the Collection Date, the Borrower SPV-S has not and shall not:
(i) engage do anything that would result in any business or activity other than the purchase, receipt, management and sale a breach of Collateral, the transfer and pledge Section 5.7(e) of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretothis Agreement;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii)this Agreement or any other Transaction Document, fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, agreement or fail to observe observe, in all material respects, limited liability company formalities;
(viii) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(viiv) commingle its assets with the assets of any of its Affiliates, or of any other PersonPerson (except for the Borrower);
(viiv) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (1) Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments, (2) ordinary course contingent obligations under the Underlying Instruments (such as customary indemnities to fronting banks, administrative agents, collateral agents, depository banks, escrow agents, etc.) and (3) Indebtedness pursuant to the Transaction Documents or any agreement for the sale or disposition of Loans;
(viiivi) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixvii) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(xviii) enter into any contract or agreement with any Person, except (a) the Transaction Documents Documents, (b) organizational documents, (c) Underlying Instruments and (bd) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of SPV-S Collateral from the Selleran Affiliate Transferor, sales of SPV-S Collateral to an Affiliate Transferor, and sales of Collateral distributions (including Permitted RIC Distributions) to the Seller and its Affiliates, each member in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents terms hereof shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerSPV-S;
(xiix) seek its dissolution or winding up in whole or in partpart or divide or permit any division of SPV-S;
(xiix) fail to correct any known misunderstandings regarding the separate identities of SPV-S, on the Borrowerone hand, the Seller and any Affiliate or any principal thereof or any other Person, on the other hand;
(xiiixi) guarantee, become obligated for, or hold itself out to be responsible for the debt of another PersonPerson (except for the Borrower);
(xivxii) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates) (except for the Borrower);
(xvxiii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operationsoperations (to the extent there exists sufficient cash flow from the SPV-S Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to SPV-S in order to comply with this provision);
(xvi) 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, or make an assignment for the benefit of creditors;
(xviixiv) except as may be required or permitted by the Code and regulations thereunder or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviiixv) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the BorrowerSPV-S’s assets may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that its Affiliates so long as (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the BorrowerSPV-S’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the BorrowerSPV-S’s own separate balance sheet;
(xixxvi) fail to pay its own liabilities and expenses only out of its own fundsfunds or the funds of the Borrower (including funds contributed to its capital by the Equityholder) (to the extent there exists sufficient cash flow from the SPV-S Collateral to do so after the payment of all operating expenses and debt services but the foregoing shall not require any equity owner to make additional capital contributions to the Borrower in order to comply with this provision);
(xxxvii) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if anyany (for the avoidance of doubt, such number may be zero);
(xxixviii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or membersmembers (unless approved by the Administrative Agent in its sole discretion);
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixix) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxx) to the extent used, fail to use separate invoices and checks bearing its own name;
(xxvxxi) except for any Permitted Lien relating to any Equity SecurityLien, pledge its assets to secure the obligations of any other Person;
(xxvixxii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) Manager who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company▇▇▇▇▇▇ Fiduciary Services, ▇▇▇▇▇▇▇ Management & Associates, National Registered Agents, Inc., Wilmington Trust Company, Lord Securities Corporation, Global Securitization Services Citadel SPV or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the BorrowerSPV-S, the Seller or the Collateral Manager or any Affiliate Transferor and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower SPV-S, or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower SPV-S, that is not in the direct chain of ownership of the Borrower SPV-S and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers independent managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the BorrowerSPV-S, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers independent managers and other corporate services to the BorrowerSPV-S, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a an immediate family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier a person described in (a) or service provider(b) above; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower SPV-S shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearSPV-S;
(xxviixxiii) fail to ensure that all limited liability company action actions relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causecomplied with;
(xxviiixxiv) fail to provide that the unanimous consent of all managers (including the consent of the BorrowerSPV-S’s Independent Manager) is required for the Borrower SPV-S to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the BorrowerSPV-S, (e) make any assignment for the benefit of the BorrowerSPV-S’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxixxxv) fail to file its own Tax tax returns separate from those of any other Person, except to the extent that the Borrower SPV-S is treated as a “disregarded entity” entity for Tax U.S. federal income tax purposes and is or to the extent that such failure does not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconstitute a breach of Section 5.7(f)(vii).
Appears in 1 contract
Sources: Loan and Security Agreement (Stepstone Private Credit Fund LLC)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not done the following and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets from the Originator under the Contribution Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Loans and the performance related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or Loans and related assets from the Originator under the Contribution Agreement and (bB) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderBorrower;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Deal Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date’s consent;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Deal Agent, amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), subsidiary or make any Investment investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Deal Agent;
(vi) commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness (A) indebtedness to the Secured Parties Lenders hereunder or in conjunction with a repayment of all Advances Aggregate Unpaids owed to the Lenders Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a termination of all the Commitmentsnote and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x) enter into any contract or agreement with any of its principal or other Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance any of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash principal or other property as a capital contribution to the BorrowerAffiliates;
(xi) seek its dissolution or winding winding-up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower or an Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvixvii) file or consent to the filing of or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviixviii) except as may be required share any common logo with or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (b) any Affiliate of a principal Affiliates or (cB) any other Person;
(xviiixix) permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets may be included Person (except its parent in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetaccordance with GAAP);
(xixxxi) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxii) fail to pay the salaries of its own employees, employees (if any) in light of its contemplated business operations;
(xxixxiii) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxiv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxv) to the extent it has invoices or checks, fail to use separate invoices and or checks bearing its own name;
(xxvxxvi) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvixxvii) fail at any time to have at least one two (12) independent manager or director directors (the each, an “Independent ManagerDirector”) who on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (B) has, (I) prior experience as an independent director, independent manager Independent Director for a corporation or independent member with limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience and who is provided by CT Corporationwith one or more entities that provide, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its businesstheir respective businesses, and which individual is duly appointed as an Independent Manager and is notadvisory, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer management or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate placement services to the Borrowerborrowers or issuers of securitization or structured finance instruments, the Collateral Manager agreements or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without causesecurities;
(xxviii) fail to provide that the unanimous consent of all managers directors (including the consent of the Borrower’s Independent ManagerDirectors) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, or (gG) take any action in furtherance of any of the foregoing; orand
(xxix) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of Skadden, except to Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, delivered on the extent that Effective Date, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (Credit Acceptance Corp)
Special Purpose Entity. At all times prior to The Borrower will not (nor has it taken any such action in the Collection Date, the Borrower has not and shall not:past):
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into Receivables and the performance related assets under the Transaction Basic Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (aA) the Collateral or (bReceivables and the 2023-1B SUBI Certificate and related assets under the Second Tier Purchase Agreement,(B) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive (C) cash generated from the Equityholderforegoing;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written Administrative Agent’s consent (acting at the direction of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection DateRequired Lenders);
(iv) except elect for the Borrower to be treated, or otherwise knowingly take any action that reasonably could cause Borrower to become taxable, as otherwise permitted under clause a corporation for U.S. federal income tax purposes;
(iii), v) fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), amend, modify, terminate or terminate, fail to comply with the provisions of its limited liability company agreement, Formation Documents or fail to observe limited liability company corporate formalities;
(vvi) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (Person, or own any equity interest in any other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offerentity, work-out or restructuring of a Loan) without the prior written consent of the Administrative AgentAgent (acting at the direction of the Required Lenders), except for the 2023-1B SUBI Certificate with respect to the Trust;
(vivii) commingle its assets with the assets of any of its Affiliates, or of any other Person, except to the extent contemplated by this Agreement;
(viiviii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or under any other Basic Document or in conjunction with a repayment of all Advances owed to the Lenders Aggregate Unpaids, except for trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and a termination of all the Commitments;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become paid when due;
(ix) [Reserved];
(x) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person; provided, however, that the Borrower may be included in Regional Management’s consolidated financial statements for Tax and reporting purposes;
(xxi) seek its dissolution or winding up, in whole or in part;
(xii) enter into any contract or agreement with any of its principals or Affiliates or any other Person, except (a) the Transaction Documents and (b) other contracts or agreements that are as contemplated by this Agreement upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
(xi) seek its dissolution or winding up in whole or in part;
(xiixiii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, the Seller Borrower from any principal or Affiliate thereof or from any other Person;
(xiiixiv) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xivxv) make any loan or advances to any third party, including any principal or Affiliate, or hold evidence of Indebtedness issued by any other Person (other than Permitted Investments and Contracts);
(xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (aA) to mislead others as to the identity of the Person with which such other party is transacting business, or (bB) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvii) fail to intend 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;
(xvixviii) 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, Insolvency Laws or make an assignment for the benefit of creditors;
(xviixix) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (aA) any of its principals or Affiliates, (bB) any Affiliate of a principal or (cC) any other Person;
(xviiixx) permit any transfer (whether in any one or more transactions) of a direct or indirect ownership interest in the Borrower unless the Borrower delivers to the Administrative Agent and each Lender an acceptable non-consolidation opinion;
(xxi) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not Person, or have its assets listed on any the financial statement of any other Person; provided, however, that the Borrower’s assets Borrower may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such Regional Management’s consolidated financial statements to indicate the separateness of the Borrower from such Person for Tax and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetreporting purposes;
(xixxxii) fail to pay its own liabilities and expenses only out of its own funds;
(xxxxiii) fail to pay or cause to be paid the salaries of its own employees, if anyapplicable, in light of its contemplated business operations;
(xxixxiv) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or membersstockholders;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiiixxv) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxvi) fail to use separate invoices and checks bearing its own name;
(xxvxxvii) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the Indebtedness to the Secured Parties hereunder;
(xxvixxviii) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is noton its board of managers; provided, and has never beenhowever, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers may be an independent director or directors); (b) a creditor, supplier or service provider (including provider manager of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “another special purpose entity” entity affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that yearRegional Management;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;
(xxviiixxix) fail to provide that the unanimous consent of all managers of the Borrower (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (aA) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolventnot Solvent, (bB) institute or consent to the institution of bankruptcy or insolvency proceedings Insolvency Proceedings against it, (cC) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvencyInsolvency Law, (dD) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (eE) make any assignment for the benefit of the Borrower’s creditors, (fF) admit in writing its inability to pay its debts generally as they become due, due or (gG) take any action in furtherance of any of the foregoing; or, and shall not make any decisions on any such actions during any period in which there is a vacancy in the Independent Manager position (except with respect to decisions as to the selection of an Independent Manager to fill such vacancy);
(xxixxxx) replace or appoint any Person as an Independent Manager of the Borrower (A) who does not satisfy the definition of an Independent Manager and (B) with less than ten days’ prior written notice to the Administrative Agent and each Lender and without an Officer’s Certificate of Regional Management that the prospective Independent Manager satisfies the definition of an Independent Manager;
(A) amend, restate, supplement or otherwise modify its Formation Documents in any respect that would impair its ability to comply with the Basic Documents or (B) fail to file require in its own Tax returns separate from those of any other Person, except limited liability company agreement that no Independent Manager may be replaced or appointed with less than ten days’ prior written notice to the extent Administrative Agent and each Lender and a certification by Regional Management that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Law.prospective Independent Manager satisfies the definition of an Independent Manager; and
Appears in 1 contract
Special Purpose Entity. At (a) This Section 9 is being adopted in order to comply with certain provisions required in order to qualify the Company as a “special purpose” entity.
(b) Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Company, the Member, the Board, any Officer or any other Person, the Company shall not, without the prior unanimous written consent of the Member and the Board, including all times Independent Managers, take any Material Action, and neither the Member nor the Board nor any Officer nor any other Person shall, be authorized or empowered, nor shall they permit the Company, without the prior unanimous written consent of the Member and the Board, including all of the Independent Managers, to take any Material Action; provided, however, that the Board may not vote on, or authorize the taking of, any Material Action unless there are at least two (2) Independent Managers.
(c) Notwithstanding anything to the Collection Datecontrary contained herein or any other document governing the formation, management or operation of the Company, in addition to any other restrictions provided in this Agreement, for so long as any obligation or liability of the Company remains outstanding under any Loan Document, the Borrower has Company shall not do, and the Managers shall notcause the Company not to do, any of the following things:
(iA) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental theretocontemplated by Section 6;
(iiB) acquire or own any assets other than (a) those related to its ownership interest in the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderProperty;
(iiiC) except as otherwise permitted under the Loan Documents and to the fullest extent permitted by applicable law, merge or consolidate itself into or consolidate with any Person Person, or dissolve, terminate or liquidate in whole or in partpart (to the fullest extent permitted by law), transfer or otherwise dispose of all or substantially all of its assets or convert to another type of legal entity (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Dateherein);
(ivD) except as otherwise permitted under clause (iii), fail to preserve its the existence of itself as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the its jurisdiction of its organization or formationorganization, or fail to observe all limited liability company formalities, or fail to maintain its books, records, resolutions and agreements as official entity records, except as permitted herein;
(E) own any subsidiary, or make any investment in, any person or entity without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalitiesLender;
(vF) form, acquire commingle its funds or own any Subsidiary, own any Capital Stock in assets with the funds or assets of any other entity Person;
(other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanG) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets Lender, incur or assume any debt on behalf of any of its Affiliates, or of any other Person;
(vii) incur any Indebtednessitself, secured or unsecured, direct or contingent (including guaranteeing any obligation), ) other than Indebtedness (i) as permitted under the Loan Documents, (ii) unsecured trade payables incurred in the ordinary course of business relating to the Secured Parties hereunder or ownership and operation of the Property with trade creditors (including, without limitation, financing leases and purchase money indebtedness incurred in conjunction the ordinary course of business relating to personal property on commercially reasonable terms and conditions, except as may be prohibited by the Loan Documents) not exceeding, together with any indebtedness of Northstar TRS, at any time, a repayment maximum amount of all Advances owed five percent (5%) of the Allocated Loan Amount (as defined in the Loan Documents) attributable to the Lenders Property and which are paid within sixty (60) days of incurrence, except as may be prohibited by the Loan Documents, and/or (iii) the performance of any monetary obligations of the Company, in its capacity as landlord, under that certain Lease Agreement, dated as of January 20, 2007, between the Company, as landlord, and Trimont Land Company, a termination of all corporation unaffiliated with the CommitmentsCompany, as tenant;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ixH) fail to maintain its the records, books of account and bank accounts and financial statements of itself separate and apart from those of any other Person, except that Company’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate; provided that the Company is properly reflected and treated as a separate legal entity in such consolidated financial statements, and that its assets are not available to satisfy claims of the consolidated entities;
(xI) other than the Loan Documents, enter into into, on behalf of itself, any contract or agreement with any Personof its members, principals, partners and Affiliates, or any member, principal, partner or Affiliate thereof, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are intrinsically fair, commercially reasonable and substantially similar no less favorable to it than those that would be available on an arm’s-length basis with third parties other than such Person; provided thatparties, for except as contemplated by the avoidance Loan Documents or by the written consent of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerLender;
(xiJ) seek maintain its dissolution assets in such a manner that it shall be costly or winding up in whole difficult to segregate, ascertain or in part;
(xii) fail to correct identify their respective individual assets from those of any known misunderstandings regarding the separate identities of the Borrowerits members, the Seller shareholders, principals, partners and Affiliates, or any member, shareholder, principal, partner or Affiliate thereof or any other Person;
(xiiiK) guaranteeassume, guaranty or become obligated forfor the debts of any other Person, or hold itself out to be responsible for the debt debts of another any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
(xivL) except as otherwise permitted under the Loan Documents, make any loans, advances to any Person or hold evidence of indebtedness issued by any other Person or entity, without the prior written consent of Lender;
(M) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or Person (and not as a division or part of any other Person except as required by federal or state income tax reporting), fail to (and has not failed to) correct any known misunderstanding regarding its separate identity, or fail to conduct its business, including all oral and written communications business solely in its own name in order not (ai) to mislead others as to the identity of the Person with which such other party is transacting business, or (bii) to suggest that it the Company is responsible for the debts of any third party (including any of its their respective partners, members, principals and Affiliates, or Affiliatesany general partner, managing member, shareholder, principal of Affiliate thereof), except as contemplated herein or by any applicable Loan Documents;
(xvN) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvi) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of an Affiliate of foregoing shall not require the Borrower or Member to make any additional capital contributions to the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheetCompany;
(xixO) fail to remain solvent or to pay its own liabilities and expenses only out of its own fundsfunds as the same shall become due, and will give prompt written notice to Lender of the insolvency or bankruptcy filing of the Company or Brighton TRS or any managing member or controlling shareholder of the Company or Brighton TRS;
(xxP) fail to pay the salaries of its own employees, employees (if any) from its own funds and to maintain either a sufficient number of employees or independent contractors pursuant to arm’s length agreement(s) for necessary and appropriate business activities and administration in light of its contemplated business operations;
(xxiQ) except in connection with any exchange offerto the extent the Company has or requires an office, work-out, restructuring or the exercise fail to maintain such office through which its business shall be conducted separate and apart from that of any rights of its Affiliates, or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead allocate shared expenses that are (including, without limitation, shared with an Affiliate, including paying for office space and services performed by any an employee of an Affiliate) among the Persons sharing expenses;
(xxivR) fail to use separate invoices and checks bearing conduct business in its own name;
(xxvS) except for any Permitted Lien relating fail to any Equity Securitymaintain and use separate stationery, pledge its assets to secure the obligations invoices and checks from those of any other Person;
(xxviT) acquire the obligations or securities of its Affiliates, or have its obligations guaranteed by any Affiliate, except as contemplated by the Loan Documents;
(U) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services either file its own tax returns or, if none applicable, a consolidated federal income tax return, as required by applicable legal requirements;
(V) violate or cause to be violated the assumptions made with respect to the Company and its members in any opinion letter pertaining to substantive consolidation delivered to Lender in connection with the Loan;
(W) fail to hold its assets in its name;
(X) fail to (and has not failed to) maintain an arms-length relationship with its Affiliates; and
(Y) except with the prior unanimous written consent of those companies is then providing professional the Lender, Member and Board, including all Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate take or consent to any action amending or modifying any provision of the BorrowerCompany’s organizational documents that alters Section 8(j) or that adversely affects any of the requirements for qualifying as a Special Purpose Entity, including any amendment or modification of this Section 9 or Section 6 hereof. Failure of the Seller Company, or any Manager or Officer on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the Collateral Manager limited liability of the Member.
(d) The Company shall not allow direct or indirect transfers of ownership interests in or control rights over the Company that would violate the provisions of any Loan Document.
(e) The Company’s obligation hereunder, if any, to indemnify its directors and that provides professional Independent Managers officers, members, or managers, as applicable, is hereby fully subordinated to each of the Loan and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never beenLoan Documents, and will not while serving as Independent Manager be, any constitute a claim against it in the event that the cash flow in excess of the following: (a) a member, partner, equityholder, manager, director, officer or employee amount required to pay the amounts outstanding under the Loan Documents is insufficient to pay such obligation; and no indemnity payment from funds of the Borrower or Company (as distinct from funds from other sources, such as insurance) of any of its equityholdersindemnity hereunder, if any, shall be payable from amounts allocable to any other person pursuant to the Loan Documents.
(f) To the fullest extent permitted by applicable law, the Collateral Manager Company shall not, without the prior written consent of Lender, issue, create, exchange, dilute or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or modify any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all additional limited liability company action relating interests of the Company other than its initial issuance of limited liability company interests issued on or prior to the appointment, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by the Administrative Agent, the Equityholder shall not cause the Independent Manager to be removed without cause;date hereof.
(xxviii) fail to provide that the unanimous consent of all managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to (a) institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take This Section 9 may not be modified, altered, supplemented or amended unless the Rating Agency Condition is satisfied. As used herein, the term “Rating Agency Condition” shall mean (i) with respect to any action taken at any time before the Loan has been sold or assigned to a securitization trust, that Lender has consented in furtherance writing to such action, and (ii) with respect to any action taken at any time after the Loan has been sold or assigned to a securitization trust, that (A) Lender has consented in writing to such action, and (B) each Rating Agency (defined below) rating securities backed by such Loan shall have been given ten (10) days prior notice thereof and that each of the Rating Agencies shall have notified Lender in writing that such action will not result in a downgrade, reduction or withdrawal of the then current rating by such Rating Agency of any of securities issued by such securitization trust backed by such Loan. As used herein, the foregoing; or
(xxix) fail term “Rating Agency” or “Rating Agencies” shall have the meanings ascribed to file its own Tax returns separate from those of any other Person, except to terms in the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable LawLoan Documents.
Appears in 1 contract
Sources: Limited Liability Company Agreement (CNL Income Mesa Del Sol, LLC)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management purchase and sale receipt of CollateralLoans and related assets, the transfer and pledge of Collateral pursuant to the terms of under the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (a) the Collateral Loans and rights in the Related Property, (b) the Equity Interests in any REO Affiliate, (c) Equity Securities acquired (i) if a Loan is no longer an Eligible Loan or (bii) in connection with the exercise of remedies or with respect to any work out or restructuring of a Loan and (d) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the EquityholderDocuments;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof)or change its legal structure, without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or or, without the prior written consent of the Administrative Agent, amendmake any material amendment or modification, modify, or terminate or fail to comply with the material provisions of its limited liability company agreementoperating agreement (which includes the special purpose entity limitations), or fail to observe limited liability company formalities;
(v) form, acquire other than with respect to the Equity Interests in any REO Affiliate or own any SubsidiaryEquity Securities, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets or liabilities with the assets or liabilities of any of its Affiliates, Affiliates or of any other Person;
(vii) incur any Indebtednessdebt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitmentshereunder;
(viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become duedue (unless otherwise contested in good faith by appropriate proceedings); provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
(x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arm’sarms-length basis with third parties other than such Person; provided that, for Person in the avoidance reasonable judgment of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to Borrower other than the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted and (ii) the Equityholder may contribute cash or other property as a capital contribution to the BorrowerDocuments;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Originator or any other Person;
(xiii) guaranteemake any loan or advances to any third party, become obligated forincluding any principal or Affiliate, or hold itself out to be responsible for evidence of indebtedness issued by any other Person (other than the debt of another PersonLoans, cash and Permitted Investments);
(xiv) fail either to file its own separate tax return or a consolidated federal income tax return with one or more of its Affiliates, except as may be permitted by the Code and regulations;
(xv) actively hold itself out to the public as such to represent that it is not a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
(xvxvi) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business obligations of its size business and character and in light of its contemplated business operations; provided, however, that the foregoing shall not require any equity owner to make additional capital contributions to the Borrower;
(xvixvii) 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, or make an assignment for the benefit of creditors;
(xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
(xviii) fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those permit any transfer (whether in any one or more transactions) of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Borrower’s assets may be included direct or indirect ownership interest in a consolidated financial statement of an Affiliate of the Borrower or to the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements extent it has the ability to indicate control the separateness of same, unless the Borrower from delivers to the Administrative Agent an acceptable non-consolidation opinion and the Administrative Agent consents to such Person and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheettransfer;
(xix) fail to pay its own liabilities and expenses only out of its own funds;
(xx) fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;
(xx) acquire the securities of its Affiliates or stockholders except for obligations or securities of any REO Affiliate or any other Subsidiary permitted hereunder;
(xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by its Affiliates or members;
(xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxivxxii) fail to use separate invoices and checks bearing its own name;
(xxvxxiii) except for any Permitted Lien relating to any Equity Security, pledge or permit the pledge of its assets to secure for the obligations benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;
(xxvixxiv) fail at any time to have at least one (1) independent manager Independent Manager or director (the “Independent Manager”) who has prior experience as an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by Director acceptable to the Administrative Agent, in each case that is not an Affiliate of the Borrower, the Seller or the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee of the Borrower or any of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxvii) fail to ensure that all limited liability company action relating to the appointment, maintenance selection or replacement of the Independent Manager or Independent Director, as applicable, are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager to be removed without causeor Independent Director, as applicable);
(xxviiixxv) fail to provide in its operating agreement that the unanimous consent of all managers managers, as applicable (including the consent of the Borrower’s Independent ManagerManager or Independent Director, as applicable) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, and (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; orand
(xxixxxvi) fail to file its own Tax returns separate take or refrain from those taking, as applicable, each of any other Personthe activities specified in the non-consolidation opinion of A▇▇▇▇▇▇ ▇▇▇▇▇ LLP, except to dated as of the extent that date hereof, upon which the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Revolving Credit Agreement (NewStar Financial, Inc.)
Special Purpose Entity. At all times prior to the Collection Date, the The Borrower has not and shall not:
: (i) engage in any business or activity other than the purchase, receipt, receipt and management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
; (ii) acquire or own any assets other than (a) the Collateral or Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents Documents, including, without limitation, capital contributions which it may receive from the Equityholder;
; (iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, structure or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
; (iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modifyamend or modify (other than in accordance with the terms hereof and thereof), terminate or fail to comply with the provisions of of, its limited liability company operating agreement, or fail to observe limited liability company formalities;
; BUSINESS.32224493.6 108 (v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), Subsidiary or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a LoanInvestments) without the prior written consent of the Administrative Agent;
; (vi) except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;
; (vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;
; (viii) become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
; (ix) fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;
, other than as expressly provided in the Transaction Documents; (x) enter into any contract or agreement with any Person, except (a) the Transaction Documents and Documents, (b) the documents specifically contemplated by the Borrower LLC Agreement, (c) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-arm’s length basis with third parties other than such Person; provided that, for the avoidance of doubt with regard to this clause (x), (i) acquisitions of Collateral from the Seller, and sales of Collateral to the Seller and its Affiliates, each in accordance with other provisions of this Agreement (including, without limitation, Section 6.2(m), Section 6.2(n) and Section 6.2(o)) and the other Transaction Documents shall be permitted Person and (iid) as otherwise permitted under the Equityholder may contribute cash or other property as a capital contribution to the Borrower;
Transaction Documents; (xi) seek its dissolution or winding up in whole or in part;
; (xii) fail to correct any known misunderstandings regarding the separate identities identity of the Borrower, Borrower and the Seller Equityholder or any principal or Affiliate thereof or any other Person;
; (xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
; (xiv) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business, including all oral and written communications business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);
; (xv) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
; (xvi) 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, or make an assignment for the benefit of creditors;
; BUSINESS.32224493.6 109 (xvii) except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;
; (xviii) fail to maintain separate financial statements, showing its assets company records and liabilities separate and apart from those books of any other Person and not have its assets listed on any financial statement of any other Personaccount; provided, however, that the Borrower’s assets and liabilities may be included in a consolidated financial statement of an Affiliate of the Borrower or the Collateral Manager (or parent company) provided that (a) appropriate notation shall be made on such consolidated financial statements to indicate Equityholder so long as the separateness of the Borrower from such Person the Equityholder and to indicate that the unavailability of the Borrower’s assets and credit are not available to satisfy the debts and other obligations of the Equityholder are disclosed by the Equityholder within all public filings that contain such Person or any other Person and (b) such assets shall also be listed on the Borrower’s own separate balance sheet;
consolidated financial statements; (xix) fail to pay its own liabilities and expenses only out of its own funds;
; (xx) fail to maintain a sufficient number of employees, if any, in light of its contemplated business operations or to pay the salaries of its own employees, if any;
; (xxi) except in connection with any exchange offer, work-out, restructuring or the exercise of any rights or remedies with respect to any Loan with respect to which an Obligor is or would thereby become an Affiliate, acquire the obligations or securities issued by of its Affiliates or members;
stockholders; (xxii) guarantee any obligation of any Person, including an Affiliate;
(xxiii) fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and space, if any, provided by an Affiliate or services performed by any employee of an Affiliate;
; (xxivxxiii) fail to use separate invoices and checks bearing its own name;
; (xxvxxiv) except for any Permitted Lien relating to any Equity Security, pledge its assets to secure the obligations of any other Person;; (xxv)
(xxviA) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who has prior experience as is not currently (a) a manager, officer, employee or Affiliate of the Borrower or the Equityholder or any major creditor, or a manager, officer or employee of any such Affiliate (other than an independent director, independent manager or independent member with at least three years of employment experience and who is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Co-Issuer Corporate Staffing, LLC, Wilmington Trust Company, ▇▇▇▇▇▇▇ Management Company, Lord Securities Corporation, Global Securitization Services or, if none of those companies is then providing professional Independent Managers, another nationally recognized company reasonably approved by the Administrative Agent, in each case that is not an Affiliate similar position of the Borrower, the Seller Equityholder or an Affiliate), or (b) the Collateral Manager and that provides professional Independent Managers and other corporate services in the ordinary course beneficial owner of its business, and which individual is duly appointed as an Independent Manager and is not, and has never been, and will not while serving as Independent Manager be, any of the following: (a) a member, partner, equityholder, manager, director, officer or employee limited liability company interests of the Borrower or any voting, investment or other ownership interests of its equityholders, the Collateral Manager or Affiliates (other than as an Independent Manager of an any Affiliate of the Borrower that is not in the direct chain of ownership of the Borrower and that is required by a creditor to be a single purpose bankruptcy-remote entity, provided that such Independent Manager is employed by a company that routinely provides professional Independent Managers or directors); (b) a creditor, supplier or service provider (including provider of professional services) to the Borrower, the Collateral Manager or any of its equityholders or Affiliates (other than a nationally recognized company that routinely provides professional Independent Managers and other corporate services to the Borrower, the Collateral Manager or any of its equityholders or Affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier or service provider; major creditor or (d) a Person that controls (whether directly, indirectly or otherwise) any of (a), (b) or (c) above. A natural person who otherwise satisfies the foregoing definition and satisfies subparagraph (a) by reason of being the Independent Manager of a “special purpose entity” affiliated with the Borrower shall be qualified to serve as an Independent Manager of the Borrower, provided that the fees that such individual earns from serving as Independent Manager of Affiliates of the Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year;
(xxviiB) fail to ensure that all limited liability company action relating to the appointmentselection, maintenance or replacement of the Independent Manager are duly authorized by the Equityholder; provided that, unless prior written consent is provided by unanimous vote of the Administrative Agent, the Equityholder shall not cause board of managers (including the Independent Manager Manager) except as otherwise permitted pursuant to be removed without cause;
the Borrower LLC Agreement; (xxviiixxvi) fail to provide that the unanimous consent of all members or managers (including the consent of the Borrower’s Independent Manager) is required for the Borrower to take any Material Action; and (axxvii) institute proceedings to be adjudicated bankrupt take or insolventrefrain from taking, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against itas applicable, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, collateral agent or any similar official for the Borrower, (e) make any assignment for the benefit each of the Borrower’s creditorsactivities specified in the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ ▇▇▇, (f) admit in writing its inability to pay its debts generally dated as they become due, or (g) take any action in furtherance of any of the foregoing; or
(xxix) fail to file its own Tax returns separate from those of any other Person, except to date hereof upon which the extent that the Borrower is treated as a “disregarded entity” for Tax purposes and is not required to file Tax returns under Applicable Law, and pay any Taxes required to be paid under Applicable Lawconclusions expressed therein are based.
Appears in 1 contract
Sources: Loan and Security Agreement (New Mountain Guardian IV BDC, L.L.C.)