Applicable to Borrower. Borrower hereby acknowledges that, as a condition of Lender’s agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, Borrower hereby represents, warrants and covenants as of the Closing Date and until such time as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the Lender’s sole discretion, Borrower: (a) was and will be organized solely for purpose of owning and operating the Mortgaged Property; (b) has not owned, does not own and will not own any assets other than the Mortgaged Property (including incidental personal property necessary for the operation thereof and proceeds therefrom); (c) was not engaged, is not engaged and will not engage in any business, directly or indirectly, other than the ownership, management and operation of the Mortgaged Property; (d) has not entered into and will not enter into any contract or agreement with any partner, member, shareholder, trustee, beneficiary, principal, joint venturer or Affiliate of Borrower except in the ordinary course of its business pursuant to written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Affiliate; (e) has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the Loan, and (ii) trade payables incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property, in such amounts as are normal and reasonable under the circumstances, provided such debt is not evidenced by a promissory note or other security instrument and is not at any time in an aggregate amount in excess of two percent (2%) of the Principal Indebtedness, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred (excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;) (f) has not made and will not make any loan or advances to any Person (including any of its Affiliates), or pledge its assets for the benefit of any other Person, or seek or obtain credit or incur any obligation to any third party based upon the assets of any other Person, or induce any third party to rely on the creditworthiness of any other Person; (g) has remained and as of the Closing Date reasonably expects to remain, solvent, and has maintained, and as of the Closing Date reasonably expects 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; (h) has not acquired and will not acquire obligations or securities of any Person; (i) has not failed and will not fail to correct any known misunderstanding or misrepresentation regarding its separate identity; (j) has done or caused to be done and will do all things necessary to preserve its existence; (k) shall continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located; (l) has conducted and operated and will conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondence, invoices, purchase orders, billing statements, applications and business forms, made solely in the name of Borrower; (m) has accurately maintained and will continue to accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members, shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy the claims of creditors of any Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower and, except with appropriate designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other Person; (n) has been and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees, beneficiaries, principals and Affiliates, and any Affiliates of any of the same), and not as a department or division of any Person; (o) has and will file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial statements, or if part of a consolidated group, is shown as a separate member of such group; (p) has paid and shall pay its own liabilities, indebtedness, and obligations of any kind, as the same shall become due, from its own separate assets, rather than from those of other Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense, to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower; (q) has not and will not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock or beneficial ownership of, any Person; (r) has not commingled and will not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal property in its own name and not in the name of any other Person; (s) has maintained and will maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person; (t) has not, does not and will not hold itself out to be responsible for the debts or obligations of any other Person and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person holding itself out as being responsible for the debts or obligations of Borrower; (u) has not and will not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person guaranteeing, assuming or otherwise becoming liable for any obligation of Borrower; (v) except for funds deposited into the Local Collection Account, the Collection Account or the Reserve Accounts in accordance with the Loan Documents, has not and shall not hold title to its assets other than in its name; (w) complies and shall at all times hereafter comply with all of the assumptions, statements, certifications, representations, warranties and covenants regarding or made by it contained in or appended to the nonconsolidation opinion delivered pursuant hereto; (x) has paid and will pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower’s obligations except to the extent that timely reimbursement is made for the same; (y) has held and will hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record keeping; (z) has allocated and will allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower’s own funds, and Borrower shall at all times use separate stationary, letterhead, invoices and checks; (aa) has not and will not identify its members or partners, Independent Director/Manager (as defined below) or any other member or partner of any Affiliate of Borrower, or any other Person, as a division or part of it; (bb) has paid and will pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations; (cc) has maintained, currently maintains, and will continue to maintain, its own cash, cash positions and bank accounts separate from any other Person; (dd) shall not (i) liquidate or dissolve, in whole or in part; (ii) consolidate, merge or enter into any form of consolidation with or into any other Person, nor convey, transfer or lease its assets substantially as an entirety to any Person (other than in accordance with Section 2.7(a) hereof) nor permit any Person to consolidate, merge or enter into any form of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Person; (iii) engage in any business other than the ownership and operation of the Mortgaged Property; or (iv) amend any provisions of its organizational documents containing provisions similar to those contained in this Article VIII;
Appears in 2 contracts
Samples: Loan Agreement (Affordable Residential Communities Inc), Loan Agreement (Affordable Residential Communities Inc)
Applicable to Borrower. Borrower hereby acknowledges that, as a condition of Lender’s 's agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, each Borrower hereby represents, warrants and covenants as of the Closing Date and until such time as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the at Lender’s sole 's discretion, each Borrower (it being understood and agreed that these provisions shall not apply to the member(s) of each Borrower or any owner of a direct or indirect interest in the Borrower:):
(a) was and will be organized solely for the purpose of owning and operating the Mortgaged Property;
(b) has not owned, does not own and will not own any assets other than the Mortgaged Property (including incidental personal property necessary for the operation thereof and proceeds therefrom);
(c) was not engaged, is not engaged and will not engage in any business, directly or indirectly, other than the ownership, development, management and operation of the Mortgaged Property (including expansions or renovations to the Mortgaged Property, and as otherwise permitted in Section 2.17 herein);
(d) has not entered into and will not enter into any contract or agreement with any partner, member, shareholder, trustee, beneficiary, principal, joint venturer or Affiliate of Borrower Borrower, except in the ordinary course of its business pursuant to written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Affiliate;
(e) has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the Loan, and (ii) trade payables not evidenced by a promissory note incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property, and customarily paid by Borrower within 60 days of incurrence and in fact not more than 60 days outstanding, and (iii) equipment financing leases and purchase money debt for equipment, in each case incurred in the ordinary course of business in connection with the use, financing or purchase of equipment used on the Mortgaged Property, the payments upon which are made currently and in any event prior to delinquency, provided, that (a) the aggregate capitalized amount of all such permitted financing leases plus the aggregate amount of all such permitted purchase money debt shall not exceed $100,000 at any time or require payments aggregating in excess of $300,000 (except such amounts may be increased to reflect the increases in the Consumer Price Index (expressed as are normal percentage) as measured over the calendar year that the Loan closed), and reasonable under (b) the circumstancesaggregate outstanding amount of (1) all trade payables described in clause (ii) above, provided such plus (2) the aggregate capitalized amount of all permitted financing leases plus the aggregate amount of all permitted purchase money debt is not evidenced by a promissory note or other security instrument and is described in clause (iii) above, shall not at any time in an aggregate amount be in excess of two percent (2%) of the Principal Indebtedness, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred (excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;).
(f) has not made and will not make any loan or advances to any Person (including any of its Affiliates), or pledge its assets for the benefit of any other Person, or seek or obtain credit or incur any obligation to any third party based upon the assets of any other Person, or induce any third party to rely on the creditworthiness of any other Person;
(g) has remained and as of the Closing Date reasonably expects to remain, solvent, and has maintained, and as of the Closing Date reasonably expects 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;
(h) has not acquired and will not acquire obligations or securities of any Person, other than, with respect to obligations only, KC Borrower or TC Borrower, as the case may be, to the extent provided under this Agreement, the other Loan Documents and the Contribution Agreement;
(i) has not failed and will not fail to correct any known misunderstanding or misrepresentation regarding its separate identity;
(j) has done or caused to be done and will do all things necessary to preserve its existence;
(k) shall continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located;
(l) has conducted and operated and will conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondence, invoices, purchase orders, billing statements, applications and business forms, made solely in the name of Borrower;
(m) has accurately maintained and will continue to accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members, shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy the claims of creditors of any Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower and, except with appropriate designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other PersonPerson (other than the other legal entity constituting Borrower);
(n) has been and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees, beneficiaries, principals and Affiliates, and any Affiliates of any of the same), and not as a department or division of any Person;
(o) has filed and will file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial statements, or if part of a consolidated group, is shown as a separate member of such group;
(p) has paid and shall pay its own liabilities, indebtedness, and obligations of any kind, as the same shall become due, from its own separate assets, rather than from those of other Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense, to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower;
(q) other than in connection with Borrower's formation transactions, has not and will not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock or beneficial ownership of, any Person;
(r) has not commingled and will not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal property in its own name and not in the name of any other Person;
(s) has maintained and will maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(t) has not, does not and will not hold itself out to be responsible for the debts or obligations of any other Person (other than the other legal entity constituting Borrower) and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person holding itself out as being responsible for the debts or obligations of Borrower;
(u) has not and will not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person (other than the other legal entity constituting Borrower) and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person guaranteeing, assuming or otherwise becoming liable for any obligation of Borrower (it being understood that notwithstanding anything to the contrary contained in this Agreement Borrower's members and any owner of any direct or indirect interest in Borrower shall not be prohibited from giving any guarantee of obligations of Persons other than Borrower);
(v) except for funds deposited into the Local Collection Account, the Collection Account Account, the concentration account in accordance with Section 2.12(a)(i) or the Reserve Accounts in accordance with the Loan Documents, has not and shall not hold title to its assets other than in its name;
(w) complies and shall at all times hereafter comply with all of the assumptions, statements, certifications, representations, warranties and covenants regarding or made by it contained in or appended to the nonconsolidation opinion delivered pursuant hereto;
(x) has paid and will pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower’s 's obligations except to the extent that timely reimbursement is made for the same;
(y) has held and will hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record keeping;
(z) has allocated and will allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower’s 's own funds, and Borrower shall at all times use separate stationary, letterhead, invoices and checks;
(aa) has not and will not identify its members or partners, Independent Director/Manager Director (as defined below) or any other member or partner of any Affiliate of Borrower, or any other Person, as a division or part of it;
(bb) has paid and will pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations;
(cc) has maintained, currently maintains, and will continue to maintain, its own cash, cash positions and bank accounts separate from any other Person;
(dd) shall not (i) liquidate or dissolve, in whole or in part; (ii) consolidate, merge or enter into any form of consolidation with or into any other Person, nor convey, transfer or lease its assets substantially as an entirety to any Person (other than in accordance with Section 2.7(a) hereof) nor permit any Person to consolidate, merge or enter into any form of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Person; (iii) engage in any business other than the ownership and operation of the Mortgaged Property; or (iv) amend any provisions of its organizational documents containing provisions similar to those contained in this Article VIII;
(ee) Borrower shall be a limited liability company formed under the laws of the State of Delaware, and Borrower's certificate of formation and operating agreement ("Borrower's Organizational Documents") shall be in form and substance reasonably satisfactory to Lender;
(ff) Borrower's Organizational Agreements shall contain each of the representations, covenants and warranties set forth in this Article VIII and require Borrower to at all times cause there to be at least one (1) duly appointed independent manager of Borrower who is also a non-economic member of Borrower and an Independent Director whose affirmative vote will be required in order for Borrower to institute proceedings to have Borrower adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Borrower or file a petition seeking or consent to, reorganization or relief with respect to Borrower under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Borrower or a substantial part of Borrower's property, or make any assignment for the benefit of creditors of Borrower, or admit in writing Borrower's inability to pay its debts generally as they become due, or any similar action, or take action in furtherance of any of the foregoing actions. Borrower's Organizational Documents shall further require that upon the occurrence of any event that causes any member of Borrower to cease to be a member in Borrower, the Independent Director shall, without action of any person and simultaneously with such member ceasing to be a member of Borrower, automatically be admitted to Borrower as a member and shall continue Borrower without dissolution;
(gg) Borrower shall cause reputable Delaware counsel reasonably acceptable to Lender (the "Law Firm") to deliver to Lender an opinion letter reasonably satisfactory to Lender whereby the Law Firm opines (which opinion may be subject to standard assumptions, qualifications, limitations and exceptions reasonably acceptable to Lender), among other requirements of Lender, that:
(1) the unanimous consent of the member(s) of Borrower and the Independent Director is required in order for Borrower to file a voluntary bankruptcy petition; (2) the provision in Borrower's Organizational Documents that requires unanimous consent as a condition to filing a voluntary bankruptcy petition is enforceable against the member(s) of Borrower;
Appears in 1 contract
Applicable to Borrower. Borrower hereby acknowledges that, as a condition of Lender’s agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, Borrower hereby represents, warrants and covenants as of the Closing Date and until such time as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the at Lender’s sole discretion, Borrower (it being understood and agreed that these provisions shall not apply to the member(s) of Borrower or any owner of a direct or indirect interest in Borrower:):
(a) was since its date of formation and at all times thereafter, has been and will be organized solely for the purpose of owning constructing, owning, developing, operating, maintaining, repairing, managing, leasing, mortgaging, pledging and operating otherwise dealing with the Mortgaged Property, and transferring the Mortgaged Property to the extent permitted by this Agreement;
(b) since its date of formation and at all times thereafter, has not owned, does not own and will not own or acquire any assets other than the Mortgaged Property (including incidental personal property necessary or desirable for the operation thereof and proceeds therefrom);
(c) was since its date of formation and at all times thereafter, has not engaged, is not engaged and will not engage in any business, directly or indirectly, other than the construction, ownership, management development, maintenance, repair, management, leasing and operation of the Mortgaged PropertyProperty (including expansions or renovations to the Mortgaged Property permitted hereunder and financing of the Mortgaged Property through obtaining the Loan) and transfer of the Mortgaged Property to the extent permitted by this Agreement;
(d) since its date of formation and at all times thereafter, and except as otherwise permitted under the Loan Documents, has not entered and shall not (i) merge into and will not enter into any contract or agreement consolidate with any partnerPerson, member(ii) to the fullest extent permitted by law, shareholderdissolve, trusteeterminate, beneficiaryliquidate in whole or in part, principal, joint venturer (iii) transfer or Affiliate otherwise dispose of Borrower except in the ordinary course all or substantially all of its business pursuant to assets, or (iv) change its legal structure without the prior written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Affiliateconsent of Lender;
(e) has not failed and shall not fail to observe all organizational and partnership or limited liability company formalities, as applicable, and has not failed and shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable legal requirements of the jurisdiction of its organization or formation, and has not failed and shall not fail to be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located, and shall not amend, modify, terminate or fail to comply with the provisions of its organizational documents;
(f) has not and, except as otherwise permitted by the Loan Documents, shall not own any subsidiary and has not made and will not make any investment in any other Person;
(g) has not and, except as expressly permitted under the Loan Documents, will not commingle its funds or assets with the funds or assets of any other Person;
(h) has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than than: (i) the Loan, and ; (ii) trade payables and operational indebtedness not evidenced by a promissory note incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property, and customarily paid by Borrower within sixty (60) days of incurrence and in fact not more than sixty (60) days outstanding; and (iii) equipment financing leases and purchase money debt for equipment, in each case incurred in the ordinary course of business in connection with the use, financing or purchase of equipment used on the Mortgaged Property, the payments upon which are made currently and in any event prior to delinquency, provided, that: (A) the aggregate capitalized amount of all such permitted financing leases plus the aggregate amount of all such permitted purchase money debt shall not exceed $100,000 at any time or require payments aggregating in excess of $300,000 (except such amounts may be increased to reflect the increases in the Consumer Price Index (expressed as are normal percentage) as measured over the calendar year that the Loan closed); and reasonable under (B) the circumstancesaggregate outstanding amount of: (1) all trade payables described in clause (ii) above; plus (2) the aggregate capitalized amount of all permitted financing leases plus the aggregate amount of all permitted purchase money debt described in clause (iii) above, provided such debt is not evidenced by a promissory note or other security instrument and is shall not at any time in an aggregate amount be in excess of two four percent (24%) of the Principal Indebtedness, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred (excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;).
(fi) has not made failed and will not make fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents as official records and separate and apart from those of any loan other Person; except that such Borrower’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided, that Borrower is properly reflected and treated as a separate entity in such consolidated financial statements of such Affiliate;
(j) has not entered into and, except as otherwise permitted under the Loan Documents, will not enter into any contract or advances agreement with any partner, member, shareholder, principal, guarantor of the obligations of Borrower or any Affiliate of the foregoing, except in the ordinary course of business pursuant to written agreements upon terms and conditions that are intrinsically fair;
(k) has maintained and shall maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Person other Person;
(including l) has not, does not and, except as otherwise permitted under the Loan Documents, will not: (i) assume, guaranty or become obligated for the debts of any other Person, hold itself out to be responsible for the debts of its Affiliates)any other Person, or otherwise pledge its assets for the benefit of any other Person, Person or seek or obtain hold outs its credit or incur any obligation as being available to any third party based upon satisfy the assets obligations of any other Person; or (ii) authorize or provide its consent to any Affiliate to assume, guaranty or become obligated for the debts of Borrower, hold itself out to be responsible for the debts of Borrower, or induce otherwise pledge its assets for the benefit of Borrower or hold out its credit as being available to satisfy the obligations of Borrower;
(m) has not made and, except as otherwise permitted under the Loan Documents, will not make any third party loans or advances to rely on the creditworthiness any Person or hold evidence of indebtedness issued by any other Person;
(gn) has remained filed and will file either its own tax returns or, if Borrower is a so-called “disregarded entity” under applicable law for tax purposes and is required or permitted to be included in the consolidated tax return of another entity, a consolidated federal income tax return;
(o) has been and will be, and at all times has held and will hold itself out to the public as a legal entity separate and distinct from any other Person (and not as a division or part of any other Person), and has and will conduct its business solely in its own name, and has not failed and will not fail to correct any known misunderstanding regarding its separate identity;
(p) has not failed to and, as of the Closing Date Date, reasonably expects to remain, solvent, and has maintained, and as of the Closing Date reasonably expects continue to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(hq) to the extent Borrower has not acquired or requires an office, will maintain an office through which its business shall be conducted separate and will not acquire obligations or securities apart from that of any Person;
of its Affiliates, and has and shall fairly and reasonably allocate shared expenses (i) has not failed and will not fail to correct any known misunderstanding or misrepresentation regarding its separate identity;
(j) has done or caused to be done and will do all things necessary to preserve its existence;
(k) shall continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located;
(l) has conducted and operated and will conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondenceshared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses, invoicesand shall use separate stationery, purchase ordersinvoices and checks. The stationery, billing statementsinvoices and checks utilized to collect Borrower’s funds or pay Borrower’s expenses shall bear Borrower’s own name, applications as applicable, and business forms, made solely in shall not bear the name of any other entity unless such entity is clearly designated as being Borrower’s agent;
(mr) has accurately maintained and will continue to accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members, shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy the claims of creditors of any Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower remained and, except with appropriate designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other Person;
(n) has been and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees, beneficiaries, principals and Affiliates, and any Affiliates of any of the same)Closing Date, reasonably expects to remain solvent and not as a department or division of any Person;
(o) has and will file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial statements, or if part of a consolidated group, is shown as a separate member of such group;
(p) has paid and shall pay its own liabilitiesliabilities and expenses (including, indebtednesswithout limitation, and obligations salaries of any kindits own employees, as the same shall become due, if any) only from its own separate assets, rather than from those of other Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense, to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower;
(q) has not and will not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock or beneficial ownership of, any Person;
(r) has not commingled and will not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal property in its own name and not in the name of any other Personfunds;
(s) has maintained not and will maintain shall not acquire obligations or securities of its assets in such a manner that it is not costly members or difficult to segregateother Affiliates, ascertain as applicable or identify have its individual assets from those of obligations guaranteed by any other PersonAffiliate, except as contemplated by the Loan Documents;
(t) has not, does not and will not hold itself out to be responsible for the debts or obligations of any other Person and, except for the Loan Documents to which other Persons are partyfullest extent permitted by applicable law, shall not consent violate or cause to be violated, in any other Person holding itself out as being responsible for material respects, the debts or obligations of Borrowerassumptions made with respect to it and its principals in the opinion letter pertaining to substantive consolidation delivered pursuant hereto;
(u) has not and will not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person failed and, except for to the extent of accounts held in the name of Lender pursuant to the Loan Documents to which other Persons are partyDocuments, shall not consent fail to any other Person guaranteeinghold its assets in its own name;
(v) has caused and shall cause all representatives of Borrower to act at all times, assuming or otherwise becoming liable for any obligation with respect to Borrower, consistently and in the best interests of Borrower;
(v) except for funds deposited into the Local Collection Account, the Collection Account or the Reserve Accounts in accordance with the Loan Documents, has not and shall not hold title to its assets other than in its name;
(w) complies and shall at all times hereafter comply with all of the assumptions, statements, certifications, representations, warranties and covenants regarding or made by it contained in or appended to the nonconsolidation opinion delivered pursuant hereto;
(x) has paid and will pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower’s obligations except to the extent that timely reimbursement is made for the same;
(y) has held and will hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record keeping;
(z) has allocated and will allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower’s own funds, and Borrower shall at all times use separate stationary, letterhead, invoices and checks;
(aa) has not and will not identify its members or partners, Independent Director/Manager (as defined below) or any other member or partner of any Affiliate of Borrower, or any other Person, as a division or part of it;
(bb) has paid and will pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations;
(ccx) has maintained, currently maintains, Borrower shall be a Delaware limited liability company which complies with the following:
(i) the limited liability company agreement of Borrower shall incorporate the provisions of this Section 8.1 and will continue to maintain, its own cash, cash positions require that the directors/managers of Borrower consider the interests of the creditors of Borrower in connection with all corporate decisions and bank accounts separate from any other Personactions;
(ddii) Borrower shall at all times cause there to be at least two (2) springing members of Borrower which, upon the dissolution of the SPC Single Member (as hereinafter defined) or the withdrawal or the disassociation of the SPC Single Member from Borrower, shall immediately become the members of the Borrower;
(iii) Borrower shall at all times cause there to be at least two (2) Independent Directors of Borrower;
(iv) Borrower’s limited liability company agreement shall provide that the unanimous written consent of all of the members of Borrower and the written consent of each of the Independent Directors (which shall be required in order for the SPC Single Member to take such action under the terms of Borrower’s limited liability company agreement) will be required in order for Borrower to: (A) file or consent to the institution of bankruptcy or insolvency proceedings against Borrower or the filing of any petition, either voluntary or involuntary, to take advantage of any applicable federal or state law relating to bankruptcy; (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official of Borrower or a substantial part of Borrower’s property; (C) take any action that might cause such entity to become insolvent or otherwise seek any relief under any laws relating to the relief of debts or the protection of creditors generally; (D) make an assignment for the benefit of creditors; (E) admit in writing Borrower’s inability to pay its debts generally as they become due, or any similar action; or (F) take action in furtherance of any of the foregoing actions;
(v) Borrower shall not cause or permit the board of directors/managers of Borrower to take any action which, under the terms of any certificate of formation, limited liability company agreement or any voting trust agreement with respect to any common stock or membership interests, requires the vote of the board of directors/managers of Borrower unless at the time of such action there shall be at two (i2) liquidate or dissolvemembers of such board of directors/managers who are Independent Directors; and
(vi) Borrower shall cause reputable Delaware counsel reasonably acceptable to Lender (the “Delaware Law Firm”) to deliver to Lender an opinion letter reasonably satisfactory to Lender whereby the Delaware Law Firm opines (which opinion may be subject to standard assumptions, qualifications, limitations and exceptions reasonably acceptable to Lender), among other requirements of Lender, that: (A) the unanimous consent of the single member of Borrower (the “SPC Single Member”) and the Independent Directors are required in whole or in partorder for Borrower to file a voluntary bankruptcy petition; (iiB) consolidatethe provision in Borrower’s Organizational Documents that requires unanimous consent as a condition to filing a voluntary bankruptcy petition is enforceable against Borrower; (C) the bankruptcy of the SPC Single Member will not cause Borrower to be dissolved; (D) no creditor of SPC Single Member shall have the right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, Borrower’s property; and (E) Delaware law, not federal law, governs the determination of what persons or entities have the authority to file a voluntary bankruptcy petition on behalf of Borrower;
(y) Borrower has complied and will comply with the separateness provisions of Borrower’s limited liability company agreement since Borrower’s limited liability company agreement was executed and delivered, and with the laws of the state of its formation relating to limited liability companies; and
(z) Borrower’s limited liability company agreement shall at all times provide that it shall not cause, permit or empower any Person to consolidate or merge or enter into any form of consolidation with or Borrower into any other Person, nor convey, transfer or lease its assets substantially as an entirety to any Person (other than in accordance with Section 2.7(a) hereof) nor permit any Person to consolidate, merge or enter into any form of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Person; (iii) engage in any business other than the ownership and operation of the Mortgaged Property; or (iv) amend any provisions of its organizational documents containing provisions similar to those contained in this Article VIII;entity.
Appears in 1 contract
Applicable to Borrower. Borrower hereby acknowledges that, as a condition of Lender’s agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, Borrower hereby represents, warrants and covenants as of the Closing Date and until such time as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the at Lender’s sole discretion, Borrower:
(a) since its date of formation and at all times thereafter, was and will be organized solely for the purpose of owning constructing, owning, developing, operating, maintaining, repairing, managing, leasing, mortgaging, pledging and operating otherwise dealing with the Mortgaged Property;
(b) since its date of formation and at all times thereafter, has not owned, does not own and will not own or acquire any assets other than the Mortgaged Property (including incidental personal property necessary or desirable for the operation thereof and proceeds therefrom);
(c) since its date of formation and at all times thereafter, was not engaged, is not engaged and will not engage in any business, directly or indirectly, other than the construction, ownership, management development, maintenance, repair, management, leasing and operation of the Mortgaged PropertyProperty (including expansions or renovations to the Mortgaged Property permitted hereunder and financing of the Mortgaged Property through obtaining the Loan);
(d) since its date of formation and at all times thereafter, and except as otherwise permitted under the Loan Documents, has not and shall not (i) merge into or consolidate with any Person (except for the merger of Borrower and Poconos Property Merger Sub, LLC, a Delaware limited liability company following which Borrower was the surviving entity), (ii) to the fullest extent permitted by law, dissolve, terminate, liquidate in whole or in part, (iii) transfer or otherwise dispose of all or substantially all of its assets, or (iv) change its legal structure without the prior written consent of Lender;
(e) has not failed and shall not fail to observe all organizational and partnership or limited liability company formalities, as applicable, and has not failed and shall not fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable legal requirements of the jurisdiction of its organization or formation, and has not failed and shall not fail to be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located, and shall not amend, modify, terminate or fail to comply with the provisions of its organizational documents;
(f) has not and, except as otherwise permitted by the Loan Documents, shall not own any subsidiary and has not made and will not make any investment in any other Person;
(g) has not and, except as expressly permitted under the Loan Documents, will not commingle its funds or assets with the funds or assets of any other Person;
(h) has not incurred (except for the Prior Loans, which have been fully paid and satisfied, and for which Borrower shall not have any continuing liability, actual or contingent, upon the closing of the Loan, and in connection with which no recourse whatsoever against any portion of the Mortgaged Property shall be available under any circumstances, other than general indemnities and environmental indemnities under the Prior Loans (and Borrower has no knowledge of any basis for any such claims) and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than: (i) the Loan; (ii) trade and operational indebtedness not evidenced by a promissory note incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property, and customarily paid by Borrower within sixty (60) days of incurrence and in fact not more than sixty (60) days outstanding; and (iii) equipment financing leases and purchase money debt for equipment, in each case incurred in the ordinary course of business in connection with the use, financing or purchase of equipment used on the Mortgaged Property, the payments upon which are made currently and in any event prior to delinquency, provided, that: (A) the aggregate capitalized amount of all such permitted financing leases plus the aggregate amount of all such permitted purchase money debt shall not exceed $100,000 at any time or require payments aggregating in excess of $300,000 (except such amounts may be increased to reflect the increases in the Consumer Price Index (expressed as percentage) as measured over the calendar year that the Loan closed); and (B) the aggregate outstanding amount of: (1) all trade payables described in clause (ii) above; plus (2) the aggregate capitalized amount of all permitted financing leases plus the aggregate amount of all permitted purchase money debt described in clause (iii) above, shall not at any time be in excess of four percent (4%) of the Principal Indebtedness.
(i) has not failed and will not fail to maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents as official records and separate and apart from those of any other Person; except that such Borrower’s financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of an Affiliate, provided, that Borrower is properly reflected and treated as a separate entity in such consolidated financial statements of such Affiliate;
(j) has not entered into and will not enter into any contract or agreement with any partner, member, shareholder, trustee, beneficiary, principal, joint venturer guarantor of the obligations of Borrower or any Affiliate of Borrower the foregoing, except in the ordinary course of its business pursuant to written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Affiliatefair;
(ek) has maintained and shall maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(l) has not incurred (except for the Prior Loans, which have been fully paid and will not incur any debtsatisfied, secured and for which Borrower shall have no continuing liability, actual or unsecuredcontingent, direct or contingent (including guaranteeing any obligation), other than (i) upon the closing of the Loan, and (ii) trade payables incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining which no recourse whatsoever against any portion of the Mortgaged PropertyProperty shall be available under any circumstances, in such amounts as are normal other than general indemnities and reasonable environmental indemnities under the circumstances, provided Prior Loans (and Borrower has no knowledge of any basis for any such debt is not evidenced by a promissory note or other security instrument and is not at any time in an aggregate amount in excess of two percent (2%) of the Principal Indebtedness, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred (excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;)
(f) has not made and will not make any loan or advances to any Person (including any of its Affiliatesclaims), does not and, except as otherwise permitted under the Loan Documents, will not: (i) assume, guaranty or become obligated for the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets for the benefit of any other Person, Person or seek or obtain hold outs its credit or incur any obligation as being available to any third party based upon satisfy the assets obligations of any other Person; or (ii) authorize or provide its consent to any Affiliate to assume, guaranty or become obligated for the debts of Borrower, hold itself out to be responsible for the debts of Borrower, or induce otherwise pledge its assets for the benefit of Borrower or hold out its credit as being available to satisfy the obligations of Borrower;
(m) has not made and, except as otherwise permitted under the Loan Documents, will not make any third party loans or advances to rely on the creditworthiness any Person or hold evidence of indebtedness issued by any other Person;
(gn) has remained filed and will file either its own tax returns or, if Borrower is a so-called “disregarded entity” under applicable law for tax purposes and is required or permitted to be included in the consolidated tax return of another entity, a consolidated federal income tax return;
(o) has been and will be, and at all times has held and will hold itself out to the public as a legal entity separate and distinct from any other Person (and not as a division or part of any other Person), and has and will conduct its business solely in its own name, and has not failed and will not fail to correct any known misunderstanding regarding its separate identity;
(p) has not failed to and, as of the Closing Date Date, reasonably expects to remain, solvent, and has maintained, and as of the Closing Date reasonably expects continue to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(hq) to the extent Borrower has not acquired or requires an office, will maintain an office through which its business shall be conducted separate and will not acquire obligations or securities apart from that of any Person;
of its Affiliates, and has and shall fairly and reasonably allocate shared expenses (i) has not failed and will not fail to correct any known misunderstanding or misrepresentation regarding its separate identity;
(j) has done or caused to be done and will do all things necessary to preserve its existence;
(k) shall continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located;
(l) has conducted and operated and will conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondenceshared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses, invoicesand shall use separate stationery, purchase ordersinvoices and checks. The stationery, billing statementsinvoices and checks utilized to collect Borrower’s funds or pay Borrower’s expenses shall bear Borrower’s own name, applications as applicable, and business forms, made solely in shall not bear the name of any other entity unless such entity is clearly designated as being Borrower’s agent;
(mr) has accurately maintained and will continue to accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members, shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy the claims of creditors of any Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower remained and, except with appropriate designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other Person;
(n) has been and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees, beneficiaries, principals and Affiliates, and any Affiliates of any of the same)Closing Date, reasonably expects to remain solvent and not as a department or division of any Person;
(o) has and will file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial statements, or if part of a consolidated group, is shown as a separate member of such group;
(p) has paid and shall pay its own liabilitiesliabilities and expenses (including, indebtednesswithout limitation, and obligations salaries of any kindits own employees, as the same shall become due, if any) only from its own separate assets, rather than from those of other Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense, to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower;
(q) has not and will not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock or beneficial ownership of, any Person;
(r) has not commingled and will not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal property in its own name and not in the name of any other Personfunds;
(s) has maintained not and will maintain shall not acquire obligations or securities of its assets in such a manner that it is not costly members or difficult to segregateother Affiliates, ascertain as applicable or identify have its individual assets from those of obligations guaranteed by any other PersonAffiliate, except as contemplated by the Loan Documents;
(t) has not, does not and will not hold itself out to be responsible for the debts or obligations of any other Person and, except for the Loan Documents to which other Persons are partyfullest extent permitted by applicable law, shall not consent violate or cause to be violated, in any other Person holding itself out as being responsible for material respects, the debts or obligations of Borrowerassumptions made with respect to it and its principals in the opinion letter pertaining to substantive consolidation delivered pursuant hereto;
(u) has not failed and will not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person and, except for the Loan Documents to which other Persons are party, shall not consent fail to any other Person guaranteeinghold its assets in its own name;
(v) has caused and shall cause all representatives of Borrower to act at all times, assuming or otherwise becoming liable for any obligation with respect to Borrower, consistently and in the best interests of Borrower;
(v) except for funds deposited into the Local Collection Account, the Collection Account or the Reserve Accounts in accordance with the Loan Documents, has not and shall not hold title to its assets other than in its name;
(w) complies and shall at all times hereafter comply with all of the assumptions, statements, certifications, representations, warranties and covenants regarding or made by it contained in or appended to the nonconsolidation opinion delivered pursuant hereto;
(x) has paid and will pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower’s obligations except to the extent that timely reimbursement is made for the same;
(y) has held and will hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record keeping;
(z) has allocated and will allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower’s own funds, and Borrower shall at all times use separate stationary, letterhead, invoices and checks;
(aa) has not and will not identify its members or partners, Independent Director/Manager (as defined below) or any other member or partner of any Affiliate of Borrower, or any other Person, as a division or part of it;
(bb) has paid and will pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations;
(ccx) has maintained, currently maintains, Borrower shall be a Delaware limited liability company which complies with the following:
(i) the limited liability company agreement of Borrower shall incorporate the provisions of this Section 8.1 and will continue to maintain, its own cash, cash positions require that the directors/managers of Borrower consider the interests of the creditors of Borrower in connection with all corporate decisions and bank accounts separate from any other Personactions;
(ddii) Borrower shall at all times cause there to be at least two (2) springing members of Borrower which, upon the dissolution of the SPC Single Member (as hereinafter defined) or the withdrawal or the disassociation of the SPC Single Member from Borrower, shall immediately become the members of the Borrower;
(iii) Borrower shall at all times cause there to be at least two (2) Independent Directors of Borrower;
(iv) Borrower’s limited liability company agreement shall provide that the unanimous written consent of all of the members of Borrower and the written consent of each of the Independent Directors (which shall be required in order for the SPC Single Member to take such action under the terms of Borrower’s limited liability company agreement) will be required in order for Borrower to: (A) file or consent to the institution of bankruptcy or insolvency proceedings against Borrower or the filing of any petition, either voluntary or involuntary, to take advantage of any applicable federal or state law relating to bankruptcy; (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or other similar official of Borrower or a substantial part of Borrower’s property; (C) take any action that might cause such entity to become insolvent or otherwise seek any relief under any laws relating to the relief of debts or the protection of creditors generally; (D) make an assignment for the benefit of creditors; (E) admit in writing Borrower’s inability to pay its debts generally as they become due, or any similar action; or (F) take action in furtherance of any of the foregoing actions;
(v) Borrower shall not cause or permit the board of directors/managers of Borrower to take any action which, under the terms of any certificate of formation, limited liability company agreement or any voting trust agreement with respect to any common stock or membership interests, requires the vote of the board of directors/managers of Borrower unless at the time of such action there shall be at two (2) members of such board of directors/managers who are Independent Directors; and
(vi) Borrower shall cause reputable Delaware counsel reasonably acceptable to Lender (the “Delaware Law Firm”) to deliver to Lender an opinion letter reasonably satisfactory to Lender whereby the Delaware Law Firm opines (which opinion may be subject to standard assumptions, qualifications, limitations and exceptions reasonably acceptable to Lender), among other requirements of Lender, that: (A) the unanimous consent of the single member of Borrower (the “SPC Single Member”) and the Independent Directors are required in order for Borrower to file a voluntary bankruptcy petition; (B) the provision in Borrower’s Organizational Documents that requires unanimous consent as a condition to filing a voluntary bankruptcy petition is enforceable against Borrower; (C) the bankruptcy of the SPC Single Member will not cause Borrower to be dissolved; (D) no creditor of SPC Single Member shall have the right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, Borrower’s property; and (E) Delaware law, not federal law, governs the determination of what persons or entities have the authority to file a voluntary bankruptcy petition on behalf of Borrower;
(y) Borrower has complied and will comply with the separateness provisions of Borrower’s limited liability company agreement since Borrower’s limited liability company agreement was executed and delivered, and with the laws of the state of its formation relating to limited liability companies; and
(z) Borrower’s limited liability company agreement shall at all times provide that it shall not cause, permit or empower any Person to consolidate or merge Borrower into any other entity. Borrower hereby further represents, warrants and certifies to and for the benefit and reliance of Lender that: (i) liquidate upon closing of the Loan, the Prior Loans shall have been fully paid and satisfied, and Borrower shall have no continuing liability, actual or dissolvecontingent, in whole for the Prior Loans or in partunder the documents which evidenced and secured the Prior Loan, and no recourse whatsoever against any portion of the Mortgaged Property shall be available to satisfy the Prior Loans under any circumstances, other than general indemnities and environmental indemnities under the Prior Loans (and Borrower has no knowledge of any basis for any such claims); (ii) consolidateBorrower has provided Lender with true, merge or enter into any form correct and complete copies of: (A) Borrower’s current (and since the date of consolidation with or into any other Person, nor convey, transfer or lease its assets substantially as an entirety to any Person inception) financial statements; (other than in accordance with Section 2.7(aB) hereofBorrower’s current (and since the date of its inception) nor permit any Person to consolidate, merge or enter into any form Organizational Agreements; and (C) all of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Personthe documents evidencing and securing the Prior Loans; (iii) engage from the Closing Date, Borrower will conduct its affairs as a special purpose bankruptcy remote entity in any business other than substantial accordance with the ownership provisions of this Section 8.1; and operation of the Mortgaged Property; or (iv) amend any provisions of its organizational documents containing provisions similar to those contained Borrower’s certifications and statements set forth in this Article VIII;the certificate attached hereto as Schedule 10 are true and correct.
Appears in 1 contract
Applicable to Borrower. Borrower hereby acknowledges that, as a condition of Lender’s agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, Borrower hereby represents, warrants and covenants as of the Closing Date and until such time as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the Lender’s sole discretion, Borrower:
(a) was and will be is organized solely for purpose of owning and operating the Mortgaged Property;
(b) has not owned, does not own and will not own any assets other than the Mortgaged Property (including incidental personal property necessary for the operation thereof and proceeds therefrom);
(c) was not engaged, is not engaged and will not engage in any business, directly or indirectly, other than the ownership, management and operation of the Mortgaged Property;
(d) has not entered into and will not enter into any contract or agreement with any partner, member, shareholder, trustee, beneficiary, principal, joint venturer or Affiliate of Borrower except in the ordinary course of its business pursuant to written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than such Affiliate;
(e) has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the Loan, and (ii) trade payables incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property, in such amounts as are normal and reasonable under the circumstances, provided such debt is not evidenced by a promissory note or other security instrument and is not at any time in an aggregate amount in excess of two percent (2%) of the Principal Indebtednessoriginal Loan Amount, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred (excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;)incurred;
(f) has not made and will not make any loan or advances to any Person (including any of its Affiliates), or pledge its assets for the benefit of any other Person, or seek or obtain credit or incur any obligation to any third party based upon the assets of any other Person, or induce any third party to rely on the creditworthiness of any other Person;
(g) has remained and as of the Closing Date reasonably expects to remain, solvent, remain solvent and has maintained, and as of the Closing Date reasonably expects 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;
(h) has not acquired and will not acquire obligations or securities of any Person;
(i) has not failed and will not fail to correct any known misunderstanding or misrepresentation regarding its separate identity;
(j) has done or caused to be done and will do all things necessary to preserve its existence;
(k) shall continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in which the Mortgaged Property is located;
(l) has conducted and operated and will conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondence, invoices, purchase orders, billing statements, applications and business forms, made solely in the name of Borrower;
(m) has accurately maintained and will continue to accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members, shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy the claims of creditors of any other Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower and, except with appropriate designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other Person;
(n) has been and will be, and at all times has held and will hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees, beneficiaries, principals and Affiliates, and any Affiliates of any of the same), and not as a department or division of any Person;
(o) has and will file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial statements, or if part of a consolidated group, is shown as a separate member of such group;
(p) has paid and shall pay its own liabilities, indebtedness, and obligations of any kind, as the same shall become due, from its own separate assets, rather than from those of other Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense, to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower;
(q) has not and will not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock or beneficial ownership of, any Person;
(r) has not commingled and will not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal property in its own name and not in the name of any other Person;
(s) has maintained and will maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(t) has not, does not and will not hold itself out to be responsible for the debts or obligations of any other Person and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person holding itself out as being responsible for the debts or obligations of Borrower;
(u) has not and will not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person and, except for the Loan Documents to which other Persons are party, shall not consent to any other Person guaranteeing, assuming or otherwise becoming liable for any obligation of Borrower;
(v) except for funds deposited into the Local Collection Account, the Collection Account or the Reserve Accounts in accordance with the Loan Documents, has not and shall not hold title to its assets other than in its name;
(w) complies and shall at all times hereafter comply with all of the assumptions, statements, certifications, representations, warranties and covenants regarding or made by it contained in or appended to the nonconsolidation opinion delivered pursuant hereto;
(x) has paid and will pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower’s obligations except to the extent that timely reimbursement is made for the same;
(y) has held and will hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record keeping;
(z) has allocated and will allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower’s own funds, and Borrower shall at all times use separate stationarystationery, letterhead, invoices and checks;
(aa) has not and will not identify its members or partnersmembers, Independent Director/Manager (as defined below) or any other member of Borrower or partner of any Affiliate of Borrower, or any other Person, as a division or part of it;
(bb) has paid and will pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations;
(cc) has maintained, currently maintains, maintains and will continue to maintain, its own cash, cash positions and bank accounts separate from any other Person;
(dd) shall not (i) liquidate or dissolve, in whole or in part; (ii) consolidate, merge or enter into any form of consolidation with or into any other Person, nor convey, transfer or lease its assets substantially as an entirety to any Person (other than in accordance with Section 2.7(a) hereof) nor permit any Person to consolidate, merge or enter into any form of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Person; (iii) engage in any business other than the ownership and operation of the Mortgaged Property; or (iv) amend any provisions of its organizational documents containing provisions similar to those contained in this Article VIII;
(ee) is a limited liability company duly formed and existing under the laws of the State of Delaware with one (1) equity member (the “Single Member”) in addition to the Independent Manager, whose limited liability company agreement (the “Borrower Organizational Documents”) contains each of the representations, covenants and warranties set forth in this Article VIII and requires Borrower to at all times cause there to be at least one (1) duly appointed independent manager of Borrower who is a natural person and also a non-economic member of Borrower (each an “Independent Manager”) whose affirmative vote will be required in order for a voluntary filing for protection under the Bankruptcy Code or similar action by Borrower and who is not at the time of such individual’s initial appointment as Independent Manager, shall not be during such individual’s tenure as Independent Manager, and may not have been at any time during the preceding five years, (i) a shareholder, member or partner of, or an officer, director, except in his or her capacity as Independent Manager of Borrower, paid consultant or employee of, customer of or supplier to or a member of the immediate family of Borrower (except in his or her capacity as Independent Manager of Borrower) or any of its shareholders, members, partners, subsidiaries or affiliates or (ii) any person or other entity controlling or under common control with any such shareholder, member, partner, supplier or customer or any member of the immediate family of any of them; provided, however, that the foregoing limitations on the use of persons who are Affiliates of Borrower as Independent Managers shall not apply to Borrower’s use of natural persons employed by CT Corporation or any reputable, national service similar to CT Corporation and reasonably approved by Lender to fill the position of Independent Manager required hereunder, notwithstanding that such persons may also act as independent directors of such Affiliates of Borrower. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through ownership of voting securities, by contract or otherwise;
(ff) will comply with the separateness provisions of the Organizational Documents since such Organizational Documents were executed and delivered, and with the laws of the State of Delaware relating to limited liability companies;
(gg) The Organizational Documents provide and shall at all times continue to provide that upon the occurrence of any event that causes the Single Member to cease to be a member of Borrower, the Independent Manager shall, without action of any person and simultaneously with the Single Member ceasing to be a member of Borrower, automatically continue as a member of such Borrower and shall continue Borrower without dissolution;
(hh) Borrower shall cause reputable Delaware counsel acceptable to Lender (the “Delaware Law Firm”) to deliver to Lender an opinion letter reasonably satisfactory to Lender, whereby the Delaware Law Firm opines (which opinion may be subject to standard assumptions, qualifications, limitations and exceptions acceptable to Lender), among other requirements of Lender, that: (1) the unanimous consent of the Single Member and the Independent Manager is required in order for Borrower to file a voluntary bankruptcy petition; (2) the provision in Organizational Documents that requires unanimous consent as a condition to filing a voluntary bankruptcy petition is enforceable against the Single Member; (3) the
Appears in 1 contract
Samples: Loan Agreement (Affordable Residential Communities Inc)
