Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows: (a) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for the ownership or operation of the Properties. (b) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operated. (c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantor, except 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 any such party. (d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage. (e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates. (f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due. (g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter. (h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records. (i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks. (j) Borrower is adequately capitalized 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. (k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower. (l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person. (m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person. (n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment. (o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity. (p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 3 contracts
Samples: Loan Agreement (Capital Automotive Reit), Loan Agreement (Capital Automotive Reit), Loan Agreement (Capital Automotive Reit)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited solely to (i) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Property, (ii) entering into this Loan Agreement with Lender, (iii) refinancing the Property in connection with a permitted repayment of the Loan and (iv) transacting any and all lawful business for which Borrower may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the PropertiesProperty, and (ii) incidental personal property necessary for and used or to be used in connection with the ownership or operation of the PropertiesProperty.
(bc) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProperty.
(cd) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor any owner of Borrower, any guarantors of the obligations of Borrower or any Affiliate of any constituent party party, owner or Guarantorguarantor (collectively, the "Related Parties"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an armsarm's-length basis with third parties other than any not so affiliated with Borrower or such partyRelated Parties. Lender acknowledges that Related Parties have executed the Management Agreement.
(de) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) the Debt and Loan; (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is not in excess of sixty days past due and is not in excess of $1,000,000 in the Guaranty aggregate; (iii) personal property financing not in excess of Payment $1,000,000 in the aggregate; and the Cash Management Agreement(iv) personal property leases providing for rental payments not in excess of $500,000 per annum. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProperty.
(ef) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party.
(fg) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to Related Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, Related Party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hi) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates any other Person and Borrower's assets will not be listed as assets on the financial statement of any constituent party and other Person; provided, however, that Borrower's assets may be included in a consolidated financial statement of a real estate investment trust (a "REIT") if inclusion on such a consolidated statement is required to comply with the requirements of GAAP. Borrower will file its own tax returns (provided and will not file a consolidated federal income tax return with any other Person; provided, however, that Borrower's financial statements and tax returns if such Person is a corporation wholly owned by a REIT, such entity may be prepared on included in a consolidated basis federal income tax return of the REIT if inclusion on such a consolidated tax return is required to comply with other entities provided that such consolidated financial statements and tax returns indicate the separate existence requirements of Borrower and its assets and liabilities)the Internal Revenue Service. Borrower shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorother Related Party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other name and shall maintain and utilize separate stationery, invoices and checks.
(jk) Borrower is adequately capitalized 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.
(kl) Neither Borrower shall not nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of material assets of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has will not commingle its assets with those of any other Person and will maintain hold all of its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.own name;
(n) Borrower will not guarantee or become obligated for the debts of any other Person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company (other than an approved single member limited liability company), the at least one general partner or managing member member, or if Borrower is a general partnership at least two general partners (the each, an "SPC ENTITYParty") shall be a corporation whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 4.1.30 as if such representation, warranty or covenant was made directly by such SPC EntityParty. Upon the withdrawal or the disassociation of the SPC Party from Borrower, Borrower shall immediately appoint a new member or general partner whose articles of incorporation are substantially similar to those of the SPC Party and deliver a new Insolvency Opinion to the Rating Agency or Rating Agencies, as applicable, with respect to the new SPC Party and its equity owners. Notwithstanding anything to the contrary in this Agreement, in no event shall the Property be transferred to any entity other than a corporation, limited partnership or limited liability company.
(p) if Borrower is an approved single member limited liability company, Borrower shall be a Delaware limited liability company that has at least (x) two (2) springing members who are individuals acceptable to Lender and who shall automatically become members of the limited liability company having a 0% economic interest therein upon the occurrence of any event which would cause the sole member of the limited liability company to cease to be a member thereof, and (y) two (2) duly appointed Independent Directors (as hereinafter defined) as directors or managers who may also be springing members, and has not caused or allowed and will not cause or allow the directors or managers of such entity to take any action requiring the unanimous affirmative vote of one hundred percent (100%) of the members of its board of directors or its managers unless both Independent Directors shall have participated in such vote;
(q) Borrower shall at all times cause there to be at least one two (2) duly appointed member members of the board of directors (an "INDEPENDENT DIRECTORIndependent Director") of the Borrower (if a corporation) or of each SPC Entity Party (if Borrower is a limited partnership or a limited liability company) reasonably satisfactory to Lender who shall is provided by a nationally recognized company that provides professional independent directors and is not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity initial appointment and has not been at any time during the preceding five (5) years and shall not be while serving as an Independent Director: (i) a shareholder of, or an officerstockholder, director (with the exception of serving other than as the an Independent Director of the SPC EntityBorrower or of a special purpose corporation affiliated with Borrower), attorneyofficer, counselemployee, partner partner, attorney or employee of, Borrower, the counsel of Borrower or such SPC Entity Party or any Affiliate of either of them, ; (ii) a customer ofcreditor, customer, supplier or supplier to, Borrower, other Person who derives any of its purchases or revenues (other than any fees derived from the performance of standard corporate representative services) from its activities with Borrower or such SPC Entity Party or any Affiliate of either of them, ; (iii) a Person controlling or under common control with any such shareholderstockholder, partner, creditor, customer, supplier or customer, other Person; or (iv) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecreditor, customer, supplier or customerother Person. (As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, .)
(1r) an individual that otherwise satisfies the foregoing Borrower shall not be disqualified from serving as (and Borrower shall not cause or permit the board of directors of an Independent Director SPC Party) to take any action which, under the terms of any applicable organizational document, requires the vote of the SPC Entity if such individual, Independent Directors unless at or prior to the time of initial appointmentsuch action there shall be at least two members who are Independent Directors.
(s) Borrower shall 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 or at Related Party.
(t) Borrower shall not pledge its assets for the benefit of any time while serving as an Independent Director other Person other than with respect to the Loan.
(u) Borrower shall maintain a sufficient number of employees in light of its contemplated business operations and pay the SPC Entity, salaries of its own employees from its own funds.
(v) Borrower shall provide in its (i) operating agreement, if it is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity)liability company, (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrowerlimited partnership agreement, if it is a limited partnership or (iii) certificate of incorporation, if it is employed by a company corporation, that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services for so long as the Loan is outstanding pursuant to the SPC EntityNote, this Agreement and the other Loan Documents, it shall not 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 without the affirmative vote of each of the Independent Directors and of all other general partners/managing members/directors.
(w) Borrower or any affiliate of either of them, and (2) shall conduct its business so that the SPC Entity assumptions made with respect to Borrower in the Insolvency Opinion shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entitytrue and correct in all respects.
Appears in 2 contracts
Samples: Loan Agreement (Glimcher Realty Trust), Loan Agreement (Glimcher Realty Trust)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited solely to (I) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Properties, (ii) entering into this Loan Agreement with Lender, (iii) refinancing the Properties in connection with a permitted repayment of the Loan and (iv) transacting any and all lawful business for which a Borrower may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for and used or to be used in connection with the ownership or operation of the Properties.
(bc) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProperties.
(cd) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor any owner of Borrower, any guarantors of the obligations of Borrower or any Affiliate of any constituent party party, owner or Guarantorguarantor (collectively, the "Related Parties"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than any not so affiliated with Borrower or such partyRelated Parties.
(de) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) the Debt Loan, and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors (which amount excludes Taxes and costs incurred in connection with a Casualty and/or Condemnation) in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is not in excess of sixty (60) days past due and does not exceed $2,000,000.00 in the Guaranty of Payment and the Cash Management Agreementaggregate. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(ef) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party.
(fg) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to Related Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, Related Party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hI) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of any other Person and Borrower's assets will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower's assets may be included in a consolidated financial statement of its Affiliates parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles ("GAAP"), but only if (i) such consolidated financial statements shall contain a footnote to the effect that Borrower's assets are owned by Borrower and any constituent party that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and (ii) such assets shall be listed on Borrower's own separate balance sheet. Borrower will file its own tax returns (provided returns; provided, however, that Borrower's financial statements and tax returns assets may be prepared on included in a consolidated basis tax return of its parent companies if inclusion on such a consolidated tax return is required to comply with the requirement of GAAP or any other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)applicable law. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 2 contracts
Samples: Loan Agreement (Inland Real Estate Corp), Loan Agreement (Inland Real Estate Corp)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does has not own and will shall not own any asset or property other than (i) the Properties, Property and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProperty.
(b) Borrower will has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Property, and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate part thereof, or of any constituent recourse obligations of Borrower or any recourse carveouts (each a “Guarantor”) or any party which is directly or Guarantorindirectly controlling, controlled by or under common control with Borrower or Guarantor (an “Affiliate”), except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an armsarm’s-length basis with third parties other than any such partyGuarantor or Affiliate.
(d) Borrower has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Property, in such amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a promissory note or other debt instrument and is not at any time in an aggregate amount in excess of two percent (2%) of the Guaranty of Payment original loan amount evidenced by the Note, and further provided that all such trade debts are paid within thirty (30) days after the Cash Management Agreementsame are incurred. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProperty unless approved by Lender in its sole and absolute discretion.
(e) Borrower has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), of Borrower (except pursuant regular distributions made to the Guaranty equity owners of Payment or as provided Borrower in the Cash Management Agreement, and shall not acquire obligations or securities ordinary course of its Affiliatesbusiness.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will shall do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate declaration of organization, trust or other organizational documents of Borrower or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Borrower’s existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will has maintained and shall maintain all of its booksfinancial statements, accounting records, financial statements books and records, bank accounts and other entity documents separate from those of its Affiliates and any constituent party of Borrower or any other person or entity, and Borrower has filed and shall file its own tax returns (provided that which shall be in the form of a consolidated tax return with Guarantor in which Borrower's ’s financial statements and tax returns may shall be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)clearly evidenced. Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Borrower or any Affiliate of any constituent party or Guarantor), . Borrower has corrected and shall correct any known misunderstanding regarding its status as a separate entity, . Borrower has conducted and shall conduct business in its own name, . Borrower has not and shall not identify itself or any of its Affiliates as a division or part of the other other. Borrower has maintained and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks. Borrower has allocated and shall allocate fairly and reasonably any overhead for shared office space.
(j) Borrower has preserved and kept and shall preserve and keep in full force and effect its existence and good standing in the state in which Borrower is adequately capitalized organized and its qualification to do business in the state in which the Property is located, and Borrower has observed and will observe all partnership, corporate or limited liability company formalities, as applicable.
(k) Borrower has maintained and shall maintain adequate capital and a sufficient number of employees for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Borrower will pay the salaries of its own employees, if any.
(kl) Neither Borrower nor any constituent party of Borrower has sought or shall not seek or consent to the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of Borrower, nor will Borrower merge with or be consolidated into any other entity or acquire by purchase or otherwise all or substantially all of the business assets of, or any stock or beneficial ownership in, any entity.
(lm) Borrower will has not and shall not commingle the funds and other assets of Borrower with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Borrower or any other Personperson, and Borrower will pay its own liabilities out of its own funds and assets.
(mn) Borrower has maintained and will 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 Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Borrower, Affiliate, Guarantor or any other Personperson.
(no) Borrower does has not and will shall not assume, guarantee, become obligated for, pledge its assets as security for, for or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Borrower from being obligated for and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Property).
(p) Borrower shall obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to time with respect to the performance of its obligations under this Mortgage.
(q) Borrower does not and shall not own any subsidiary. Borrower has not made and shall not make any investment in any person or entity.
(r) Borrower has not and shall not, without the unanimous consent of all its general partners, directors or members, as applicable, (i) file or consent to the filing of any petition, either voluntary or involuntary, to avail itself of any applicable insolvency, bankruptcy, liquidation or reorganization statute or (ii) make an assignment for the benefit of creditors.
(s) Borrower shall be a limited liability company formed under the laws of the State of Delaware with one (1) member (the “Single Member”), and Borrower’s certificate of formation and operating agreement (“Borrower’s Organizational Documents”) shall be in form and substance reasonably satisfactory to Lender.
(t) Borrower’s Organizational Documents shall contain each of the representations, covenants and warranties set forth in this Section 9 and shall require Borrower to at all times cause there to be at least one (1) duly appointed independent manager or independent member of the board of directors (an "INDEPENDENT DIRECTOR"“Independent Director”) of the SPC Entity Borrower who shall be an individual, natural person and whose vote will be required in connection with the voluntary filing for protection under the Bankruptcy Code or similar action by Borrower and who is not have been at the time of such individual's initial appointment, and shall may not be at any time while serving as a director of the SPC Entity and has not have been at any time during the preceding five (5) years (i) years, a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity)director, attorneypartner, counsel, partner paid consultant or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themits shareholders, (ii) subsidiaries or affiliates, a customer of, or supplier to, Borrower, the SPC Entity Borrower or any Affiliate of either of themits shareholders, (iii) subsidiaries or affiliates, or a Person person or other entity controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customercustomer 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 or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding Borrower’s Organizational Documents shall further require that upon the foregoingoccurrence of any event that causes the Single Member to cease to be a member in Borrower, the Independent Director shall, without action of any person and simultaneously with the Single Member ceasing to be a member of Borrower, automatically be admitted to Borrower as a member and shall continue Borrower without dissolution.
(u) 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) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an unanimous consent of Single Member and the Independent Director of the SPC Entity if such individual, at or prior is required in order for Borrower to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of file a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organizedvoluntary bankruptcy petition; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services provision in Borrower’s organizational documents that requires unanimous consent as a director condition to filing a voluntary bankruptcy petition is enforceable against Single Member; (3) the bankruptcy of Single Member will not cause Borrower to be dissolved; (4) no creditor of Single Member shall have the SPC Entityright to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, Borrower’s property; and (5) 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.
Appears in 2 contracts
Samples: Deed of Trust and Security Agreement (Infousa Inc), Deed of Trust and Security Agreement (Infousa Inc)
Single Purpose Entity/Separateness. Borrower Trustor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Trustor does not own and will not own any asset or property other than (i) the PropertiesTrust Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesTrust Property.
(b) Borrower Trustor will not engage in any business other than the ownership, management and operation of the Properties Trust Property and Borrower Trustor will conduct and operate its business as presently conducted and operated.
(c) Borrower Trustor will not enter into any contract or agreement with any Affiliate affiliate of Borrowerthe Trustor, any constituent party of BorrowerTrustor, Guarantor any guarantor (a "GUARANTOR" of the Debt or any Affiliate part thereof or any affiliate of any constituent party parry or Guarantor, except 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 panics other than any such party.
(d) Borrower Trustor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementPremises. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageTrust Property.
(e) Borrower Trustor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates.
(f) Borrower Trustor is and will remain solvent and Borrower Trustor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Trustor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Trustor will not, nor will Borrower Trustor permit any SPC Entity constituent party or Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Trustor or such SPC Entity in any manner that would affect the status of Borrower constituent party or such SPC Entity as a single- purpose, bankruptcy-remote entity, Guarantor without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterBeneficiary.
(h) Borrower Trustor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Trustor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)unless required otherwise by applicable law. Borrower Trustor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Trustor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerTrustor, any constituent party of BorrowerTrustor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks.
(j) Borrower Trustor is adequately capitalized 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.
(k) Borrower shall not Neither Trustor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrowerthe Trustor.
(l1) Borrower Trustor will not commingle the funds and other assets of Borrower Trustor with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or of Guarantor, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 2 contracts
Samples: Deed of Trust, Assignment of Leases and Rents and Security Agreement (First Potomac Realty Trust), Deed of Trust, Assignment of Leases and Rents and Security Agreement (First Potomac Realty Trust)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for the ownership or operation of the Properties.
(b) Borrower will not engage in any business other than the ownership, management management, leasing and operation of the Properties Property and Borrower will conduct and operate its business as presently conducted and operated.
(cb) Borrower will not enter into any contract or agreement with any Affiliate affiliate of Borrower, any constituent party of Borrower, Guarantor the holder of any partnership or membership interest, any manager or the owner of any beneficial interest in Borrower (each, a "Beneficial Owner") or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gc) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existenceexistence including, without limitation, the holding of such annual and other meetings as are required by Borrower's organizational documents, and Borrower will not, nor will Borrower permit any SPC Entity constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust certificate of organization, trust and agreement or other organizational documents of Borrower or such SPC Entity in constituent party or Beneficial Owner, if such amendments would violate any manner that would affect provision of the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entityProject Loan Documents, without (i) the prior written consent of Lender, in its sole discretion andwhich consent shall not be unreasonably withheld, nor will Borrower permit any constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, trust certificate and agreement or other organizational documents of such constituent party or Beneficial Owner, if such amendment, modification or change (i) would adversely affect the bankruptcy remote nature of Borrower; or (ii) if a Securitization has occurred, delivery would adversely affect Lender's interest in the Project Loan. Borrower shall deliver copies of minutes of annual meetings of Borrower to Lender within thirty (30) days of a No Downgrade Letterits receipt of written request therefor.
(hd) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)where required by applicable code or regulation. Borrower shall maintain its books, records, resolutions and agreements as official records.
(ie) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor Beneficial Owner or any Affiliate of any constituent party or Guarantorparty), and shall conduct business in its own name and shall maintain and utilize separate stationery, invoices and checks. Borrower shall correct any known or unknown misunderstanding regarding its status as a separate entity, shall conduct business in its own name, entity and shall not identify itself as a division or part of its Affiliates or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checksBorrower.
(jf) Borrower is adequately capitalized 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.
(kg) Neither Borrower shall not nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of Borrower or the sale of all or substantially all of Borrower's or any constituent party's assets.
(lh) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(mi) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(nj) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(ok) If Borrower is a limited partnership or a limited liability company, the partnership or business trust, at least one manager, managing partner, general partner or managing member trustee (the "SPC ENTITYMember") of Borrower shall itself be a limited liability company or corporation whose the sole asset of which is its interest in Borrower and which at all times has as one of its members or directors an individual who qualifies as an Independent Director, the SPC Entity SPE Member will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.40 5.12 as if such representation, warranty or covenant was made were made, mutatis mutandis, directly by such SPC EntityMember, the SPC Member and the Beneficial Owner shall cause Borrower at all times to comply with each of the representations, warranties, and covenants contained in this Section 5.12.
(pl) Borrower shall not cause or permit the board of directors of Borrower or the SPC Member, as applicable, to take any action which, under the terms of any certificate of incorporation, by-laws, operating agreement or any voting trust agreement with respect to any common stock, requires the unanimous vote of the board of directors of Borrower or the general partners or members of Borrower or the SPC Member, as applicable, unless at all times cause the time of such action there to shall be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC EntityMember, as applicable, who is an Independent Director.
(m) Borrower has not incurred and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to will not incur any indebtedness, dissolvesecured or unsecured, liquidatedirect or indirect, consolidate, merge and/or sell assets; absolute or contingent (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause including guaranteeing any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entityobligation), other than (i) the Project Loan or (ii) makes retail purchases of vehicles unsecured trade debt customarily payable within thirty (30) days. Borrower shall deliver a certificate to Lender within thirty (30) days upon written request from dealerships that are affiliates Lender but not more frequently than on an annual basis except for good cause shown, certifying as to its compliance with each of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate provisions of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entitythis Section 5.12.
Appears in 2 contracts
Samples: Project Loan Agreement (Agree Realty Corp), Project Loan Agreement (Agree Realty Corp)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProjects, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProjects.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Projects and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProjects. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgageany Project.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor party or any Affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesAffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns returns, if any, as may be prepared on required under applicable law, to the extent not part of a consolidated basis with other entities provided that such group filing a consolidated financial statements return, and tax returns indicate the separate existence of Borrower and its assets and liabilities)pay any taxes so required to be paid under applicable law. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the each general partner or managing member (the "each, an “SPC ENTITY"Party”) shall be a corporation limited liability company whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 6.14 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors special manager (an "INDEPENDENT DIRECTOR"“Independent Director”) of the each SPC Entity Party in Borrower who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.the
Appears in 2 contracts
Samples: Loan Agreement (Extra Space Storage Inc.), Loan Agreement (Extra Space Storage Inc.)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower has not engaged in and will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProject.
(c) Borrower has not entered into and will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except upon terms and conditions that have been, are and shall be intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in purchase-money financing of equipment and other personal property used on the Guaranty of Payment and the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the PropertiesProject; provided, except that, debt incurred pursuant to (iii) above may be secured by the Junior Mortgageequipment and other personal property being purchased.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and has not and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower has been, is and will remain solvent and Borrower has paid, and will pay pay, its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same have become due and as same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity manager or other Person in control of Borrower to amend, modify or otherwise change any provision of the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity any manager or other Person in any manner that would affect the status control of Borrower in a manner which adversely affects Borrower’s or such SPC Entity manager’s or other Person’s existence as a single- purpose, bankruptcy-remote entity, single purpose entity without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower has maintained, and will maintain maintain, all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and at all times has held itself out and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other provided, that, Borrower may contract with any property manager for the Project for (i) the rights under a nonexclusive license authorizing Borrower to use various service marks, trademarks, and trade names (e.g. “The Grove,” “Go Grove,” and “Campus Crest”) for purposes of marketing the Project to prospective tenants, (ii) the use by such property manager of such licensed service marks, trademarks and trade names on behalf of Borrower for purposes of marketing the Project to potential tenants, and (iii) space on a nonexclusive website which advertises the Project to potential tenants along with other properties managed by such property manager that are also licensed to use such service marks, trademarks and trade names, and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checkschecks provided, that, the foregoing shall not limit the ability of any property manager under a management agreement acting on behalf of Borrower to use such manager’s own stationery and invoices so long as, in matters affecting legal rights and obligations of Borrower or the Project, such manager shall identify its representative capacity of Borrower and/or the Project so as to avoid any misunderstanding of Borrower’s separate identity.
(j) Borrower is adequately capitalized has maintained, and will maintain 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower has not commingled and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower has not, and Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the each general partner or managing member (the "each, an “SPC ENTITY"Party”) shall be a corporation or limited liability company whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 6.14 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 2 contracts
Samples: Loan Agreement (Campus Crest Communities, Inc.), Loan Agreement (Campus Crest Communities, Inc.)
Single Purpose Entity/Separateness. Borrower representsEach Mortgagor represents and warrants severally as to itself only, ---------------------------------- warrants and not jointly and severally as to any other Mortgagor, to Mortgagee and covenants with Mortgagee as follows:
(a) Borrower Mortgagor does not own and will not own own, and since the date of its formation has not owned, any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage engage, and since the date of its formation has not engaged, in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party Mortgagor or Guarantor, except upon terms teims 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 any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) unsecured trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal nonnal and reasonable under the circumstancescircumstances and such debt is not evidenced by a promissory note executed by Mortgagor, except pursuant (iii) debt incurred in the ordinary course of Mortgagor's business to finance equipment and other personal property used on the Guaranty Premises the removal of Payment which would not materially damage the Improvements or materially impair the value of the Improvements, provided that such debt is not evidenced by a promissory note executed by Mortgagor and is not secured by any property other than the Cash Management Agreementitem of equipment or personal property so financed; and (iv) payment of the preferred equity peitnitted under Subparagraph (g) above. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or and any Affiliate of any constituent party Mortgagor or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesGuarantor or any Affiliate of Mortgagor or Guarantor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, good standing and Borrower right to do business in the state where it is organized or registered and in the state where the Premises are located, and Mortgagor will not, nor and will Borrower not permit any SPC Entity its Governing Entity, to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylawsorganization, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC the Governing Entity in any manner that would affect either amend or modify the status terms of Borrower the preferred equity referred to in Paragraph 8(g) above or such SPC cause Mortgagor or the Governing Entity as a single- purpose, bankruptcy-remote entityto be violation of any other provision of this Paragraph 9, without (i) the prior written consent of LenderMortgagee, in its sole discretion andwhich consent will not be unreasonably withheld, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letterdelayed or conditioned.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Guarantor and the Affiliates of Mortgagor and any constituent party Guarantor, and Mortgagor will file its own tax returns (provided except that Borrower's financial statements and as long as Mortgagor
is a disregarded entity for United States federal income tax returns may purposes Mortgagor will be prepared on shown as a separate member of the consolidated basis with other entities provided that such consolidated financial statements and group of which Mortgagor is a part for United States federal income tax returns indicate the separate existence of Borrower and its assets and liabilitiespurposes). Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity person (including Guarantor and any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Mortgagor and Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized and . Mortgagor 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage Agreement (American Realty Capital Healthcare Trust Inc)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which each Borrower is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing such Borrower’s Individual Property, (B) entering into the Loan with the Lender, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a limited liability company may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Each Borrower has not owned, does not own and will not own any asset or property other than (i) the Propertiesits Individual Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the Propertiessuch Individual Property.
(bc) Each Borrower has not engaged, and will not engage engage, in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedIndividual Property.
(cd) Each Borrower has not entered, and will not enter enter, into any contract or agreement with any Affiliate affiliate of such Borrower, any constituent party of such Borrower, Guarantor any owner of the Borrower, the Guarantors (as hereinafter defined) or any Affiliate of affiliate or any constituent party or of Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with such Borrower or any constituent party of such partyBorrower or any owner of such Borrower.
(de) Each Borrower has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt Loan and debt permitted under Section 3.4(i) above. Other than the Loan, no indebtedness may be secured (subordinate or pari passu) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageBorrower or any constituent entity thereof, or by any other Property of Borrowers.
(ef) Each Borrower has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of such Borrower or any owner of such Borrower, or any Guarantor or any Affiliate of affiliate or any constituent party or of Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party .
(fg) Each Borrower is and will remain solvent and each Borrower has paid and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same have or shall become due.
(gh) Each Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and each Borrower has not and will not, nor will each Borrower permit any SPC Entity constituent party of such Borrower or any owner of such Borrower or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of such Borrower or such SPC Entity in any manner that would affect constituent party or Guarantor without the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hi) Each Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Each Borrower’s assets have not been, and will not be, listed as assets on the financial statement of any other entity. Each Borrower has maintained and will 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 such Borrower’s assets may be included in a consolidated financial statement of its affiliate if required to comply with the requirements of generally accepted accounting principles (“GAAP”), provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of such Borrower from such affiliate and to indicate that such Borrower’s assets and credit are not available to satisfy the debts and other obligations of such affiliate or any other Person and (ii) such assets shall also be listed on such Borrower’s own separate balance sheet. Each Borrower has filed and will file its own tax returns (provided that Borrower's financial statements and has not and will not file a consolidated federal income tax return with any other entity except to the extent required to file consolidated tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements by law. Each Borrower has maintained and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(ij) Each Borrower 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 entity (including any Affiliate affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of affiliate or any constituent party or of Guarantor), has corrected and shall correct any known misunderstanding regarding its status as a separate entity, has conducted and shall conduct business in its own name, has not identified, and shall not identify identify, itself or any of its Affiliates affiliates as a division or part of the other and has maintained and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Each Borrower is adequately capitalized has maintained 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.
(kl) Neither each Borrower shall not nor any constituent party thereof has sought or will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of material assets of such Borrower.
(lm) Each Borrower has not commingled and will not commingle the funds and other assets of such Borrower with those of any Affiliate affiliate or any constituent partyparty of such Borrower or any owner of such Borrower, any Guarantor, or any Affiliate of affiliate or any constituent party or of Guarantor, or any other Person.
(m) Borrower has person, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower has not commingled and will not commingle its assets with those of any other person or entity and will hold all of its assets in its own name.
(o) Each Borrower has not guaranteed and will not guarantee or become obligated for the debts of any other entity or person and has not, does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Personperson, except pursuant as a co-obligor with respect to the Guaranty of PaymentLoan.
(op) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower has and the SPC Entity will at all times comply, comply with all of the terms and will cause Borrower to comply, provisions contained in its organizational documents and with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC EntityParagraph 3.8.
(pq) Borrower shall at all times cause there to be at least one duly appointed member natural person to act as independent director (an “Independent Director”) of Borrower pursuant to the terms of the board Limited Liability Company Agreement of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity Borrower approved by Lender, in each case reasonably satisfactory to Lender who shall is not have been at the time of such individual's initial appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years years: (ia) stockholder, director, officer, employee, partner, attorney or counsel of the Borrower or any affiliate of Borrower; (b) a shareholder ofcustomer, supplier or an officer, director other person who derives more than ten percent (10%) of its purchases or revenues from its activities with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate affiliate of either of them, Borrower; (iic) a customer of, person or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person other entity controlling or under common control with any such shareholderstockholder, partner, customer, supplier or customer, other person; or (ivd) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecustomer, supplier or customerother person. As used herein, the term "“control" ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding .
(r) Borrower shall not, without the foregoingprior unanimous written consent of the member of Borrower and all Independent Directors of Borrower, take any Material Action (1as defined below); provided that such member may not vote on or authorize the taking of any Material Action unless there is at least one Independent Director then serving in such capacity.
(s) Each Borrower has allocated and shall allocate fairly and reasonably any overhead expenses that are shared with an individual that otherwise satisfies the foregoing affiliate, including paying for office space and services performed by any employee of an affiliate.
(t) The stationery, invoices and checks utilized by each Borrower or utilized to collect its funds or pay its expenses has born and shall bear its own name and has not born, and shall not be disqualified from serving bear the name of any other entity, unless such entity is clearly designated as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, being Borrower’s agent.
(iu) is an Independent Director of a "special purpose entity" affiliated with the Each Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on has not pledged and shall not pledge its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC EntityLoan, except as a co-obligor with respect to the Loan.
(v) Each Borrower 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 affiliate or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entityother Person.
Appears in 1 contract
Samples: Loan Agreement (GTJ REIT, Inc.)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- hereby represents and warrants to Mezzanine Lender as of the date hereof and (unless otherwise consented to by Mezzanine Lender) covenants and/or agrees (as the case may be) as follows:
(a) Each of the Borrower and Mortgagors and the Mortgagor Managing Entity shall engage solely in the following business and shall not conduct its business in any manner inconsistent with the following: (i) in the case of Borrower, owning a 100% membership interest in Mortgagor I and a 100% membership interest in Mortgagor II, borrowing and giving security for the Mezzanine Loan pursuant to the terms of the Mezzanine Loan Documents and performing all acts required or permitted under the Mezzanine Loan, and transacting any and all lawful business for which a limited liability company may be organized under the Delaware Limited Liability Act that is incident, necessary and appropriate to the foregoing; (ii) in the case of each Mortgagor, owning, holding, selling, leasing, developing, financing, refinancing, transferring, exchanging, operating and managing the Mortgaged Property owned by such Mortgagor, borrowing and giving security for the Mortgage Loan pursuant to the terms of the Mortgage Loan Documents and performing all acts required or permitted under the Mortgage Loan, and transacting any and all lawful business for which a limited liability company may be organized under the laws regarding, and engaging in such other lawful activities permitted to, limited liability companies under the statute under which such Mortgagor is formed as are necessary, incidental or appropriate in connection therewith; and (iii) in the case of the Mortgagor Managing Entity, acting as non-member manager of each Mortgagor and engaging in such activities as are necessary, incidental or advisable in connection therewith.
(b) The Borrower does not own and or will not own any asset or property other than (i) the Properties, Pledged Company Interests and (ii) incidental personal property necessary for the ownership of such interests. The Mortgagor Managing Entity does not own nor will it own any asset or operation property other than (i) an ownership interest (if any) in the entity set forth in Schedule I and (ii) incidental personal property necessary for the ownership of such interests. None of the Properties.
(b) Borrower Mortgagors will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property, and Borrower each Mortgagor will conduct and operate its business as presently conducted and operatedoperated in all material respects. The Borrower will not engage in any business other than the ownership of the Pledged Company Interests, and will conduct and operate its business as presently conducted and operated in all material respects.
(c) [Reserved].
(d) None of the Mortgagors or the Borrower will not enter into any contract or agreement with any Affiliate of Borrower, such Mortgagor or Borrower or any constituent party of Borrower, Guarantor such Mortgagor or Borrower or any Affiliate of any constituent party or Guarantorparty, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-arm's length basis with third parties other than any such party.
(de) Neither Borrower, either Mortgagor nor the Mortgagor Managing Entity has any outstanding Indebtedness for borrowed money, and, notwithstanding any other provision of this Agreement, and so long as any obligations under the Mezzanine Note remain outstanding and have not been discharged in full, neither Borrower, either Mortgagor nor the Mortgagor Managing Entity will (and Borrower has agrees that it will not incurred permit either Mortgagor to, and will cause each Mortgagor to cause the Mortgagor Managing Entity not to) incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (ix) in the Debt case of Borrower and (ii) Mortgagor Managing Entity, unsecured trade payables and operational debt not evidenced by a note and in an aggregate amount (for each such entity) not exceeding $100,000 at any one time, PROVIDED that such trade payables and operational debt shall be not more than ninety (90) days past due and incurred in the ordinary course of business with trade creditors business, and (y) in amounts as are normal the case of Mortgagors, Indebtedness of the types described in clauses (ii) and reasonable under (iii) of Section 3.1.24(d) of the circumstances, except pursuant Mortgage Loan Agreement (subject to the Guaranty of Payment limitations contained therein); PROVIDED, FURTHER, HOWEVER, each Mortgagor is authorized to execute, deliver and perform the Mortgage Note, the Mortgage and the Cash Management Agreement. No Indebtedness other than Mortgage Loan Documents and Borrower is authorized to execute, deliver and perform the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.Mezzanine Loan Documents;
(ef) None of the Mortgagors or the Borrower has not made made, and none of the Mortgagors or the Borrower will not make make, any loans or advances in the nature of loans to any third party (including any Affiliate or constituent party, any Guarantor party of the Mortgagors or any Affiliate of any constituent party or GuarantorBorrower), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(fg) Each Mortgagor and the Borrower is and will remain solvent and the Borrower and each Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its their own assets as the same shall become due.
(gh) Each Mortgagor and the Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and none of the Mortgagors or the Borrower will notwill, nor will any Mortgagor or the Borrower permit any its respective SPC Entity to Party to, amend, modify or otherwise change the partnership certificate, partnership agreementcertificate of formation, articles of incorporation and bylaws, operating agreement, certificate of organization, trust limited liability company agreement or other organizational documents of such Mortgagor, Borrower or such SPC Entity Party in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) violates the prior written consent of Lendersingle purpose covenants set forth in this Section 5.1, in its sole discretion and, or (ii) if a Securitization has occurredamends, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of modifies or otherwise changes any provision thereof that by its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will terms cannot be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be modified at any time while serving as a director of when the SPC Entity and has not been at any time during Mortgage Loan or the preceding five (5) years (i) a shareholder of, Mezzanine Loan is outstanding or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall its terms cannot be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrowermodified without Mezzanine Lender's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entityconsent.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Mortgagor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Mortgaged Property, (B) entering into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Mortgagor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing. Loan No. 6518217
(b) Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesMortgaged Property.
(bc) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedMortgaged Property.
(cd) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, Guarantor any owner of the Mortgagor, the Guarantors (as hereinafter defined) or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Mortgagor or any such partyconstituent party of Mortgagor or any owner of Mortgagor.
(de) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion thereof, or by interests in the Mortgagor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementMortgagor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passuPARI PASSU) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageMortgagor or any constituent entity thereof.
(ef) Borrower Mortgagor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(fg) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party of Mortgagor or any owner of Mortgagor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Mortgagee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, records and financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Mortgagor's assets will not be listed as assets on the financial statement of any other entity except the ownership interests in Mortgagor may be listed as assets on the financial statements of the Trust or Partnership. Mortgagor shall have its own separate financial statement, provided, however, that Mortgagor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of Loan No. 6518217 generally accepted accounting principles ("GAAP"), provided that such consolidated financial statement shall contain a footnote to the effect that Mortgagor's assets are owned by Mortgagor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Mortgagor's own separate balance sheet. Mortgagor will file its own tax returns (provided that Borrower's financial statements if required by law and will not file a consolidated federal income tax returns may return with any other corporation except the Trust or Partnership in which case Mortgagor will be prepared shown on a separate schedule of such return as a separate member of the consolidated basis group with other entities provided that such consolidated its delineated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)information. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other except the Trust and Partnership and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Mortgagor.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has person, except for the Manager, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower Mortgagor will not commingle its assets with those of any other person or entity except the Manager and will hold all of its assets in its own name or in its agent's name.
(o) Mortgagor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityperson.
(p) Borrower Mortgagor shall at all times cause there 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.
(q) The stationery, invoices and checks utilized by Mortgagor or utilized to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who collect its funds or pay its expenses shall not have been at the time of such individual's appointment, bear its own name and shall not be at any time while serving as a director of bear the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family name of any other entity unless such shareholder, officer, director, partner, employee, supplier or customerentity is clearly designated as being Mortgagor's agent. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwiseLoan No. Notwithstanding the foregoing, 6518217
(1r) an individual that otherwise satisfies the foregoing Mortgagor shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on pledge its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC Entity, the Borrower or Loan.
(s) Mortgagor shall correct any affiliate of either of them, and known misunderstanding regarding its separate identity.
(2t) the SPC Entity Mortgagor shall be entitled to pay reasonable fees to the Independent Director for his or her services not identify itself as a director division of any other person or entity except for the SPC EntityTrust or Partnership.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Each Borrower does not own and will not own any asset or property other than (i) the Propertiesapplicable Project, and (ii) incidental personal property Personal Property necessary for the ownership or operation of the Properties.
(b) applicable Project. Each Borrower will not engage in any business other than the ownership, management and operation of the Properties applicable Project and such Borrower will continue to conduct and operate its business (i.e., renting its Project to On Stage Theaters, Inc. for the purpose of operating a dinner theater live production show) as presently conducted and operated.
(c) . Other than the applicable On Stage Lease, no Borrower will not enter into any contract or agreement with any Affiliate Affiliated Parties of BorrowerBorrower except if such Affiliated Parties have the requisite skills therefor, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantor, except and then only 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 any such party.
(d) . No Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or GuarantorAffiliated Parties), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Affiliated Parties. Each Borrower is and will remain solvent solvent, and each Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) . Each Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates Affiliated Parties and any constituent party and each Borrower will file its own tax returns (provided that Borrower's financial statements and returns, unless such Borrower is included within the consolidated tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)OSE. Each Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) . Each Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from ncluding any other entity (including any Affiliate Affiliated Parties of such Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), ) shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates Affiliated Parties as a division or part of the other (except as subsidiaries of OSE) and shall maintain and utilize a separate stationery, telephone number and separate invoices and checks.
(j) . Each Borrower is adequately capitalized 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.
(k) . Neither any Borrower shall not nor any Affiliated Parties of any Borrower will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of such Borrower.
(l) . No Borrower will not commingle the funds and other assets of such Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, Affiliated Parties or any other Person.
(m) person. Each Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, Affiliatd Parties or any other Person.
(n) person. Each Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower representsThe Owner Participant hereby represents and warrants to, ---------------------------------- warrants and covenants with, the Indenture Trustee and the Holders that as followsof the date hereof and until such time as the indebtedness secured hereunder shall be paid in full:
(a) Borrower The Owner Participant does not own and will not own any asset or property other than (i) the PropertiesBeneficial Interest in the Lessor, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesBeneficial Interest in the Lessor.
(b) Borrower To the extent its office, if any, is located in the offices of any of its Affiliates, the Owner Participant will pay fair market rent for its office space located therein and its fair share of any overhead costs with respect thereto.
(c) The Owner Participant will not engage in any business other than the ownership, management and operation ownership of the Properties Beneficial Interest in the Lessor, and Borrower the Owner Participant will conduct and operate its business as presently conducted and operated.
(cd) Borrower The Owner Participant will not enter into any contract or agreement with any Affiliate of Borrowerthe Owner Participant, any constituent party of Borrowerthe Owner Participant, Guarantor any guarantor or any Affiliate of any constituent party or Guarantorguarantor, except 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 any such party.
(de) Borrower The Owner Participant has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and unsecured trade debt or accounts payable customarily payable within thirty (ii30) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgagedays.
(ef) Borrower The Owner Participant has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor guarantor or any Affiliate of any constituent party or Guarantorguarantor), except pursuant to shall not pledge its assets for the Guaranty benefit of Payment or as provided in the Cash Management Agreement, any other entity and shall not acquire obligations or securities of its members or its Affiliates.
(fg) Borrower The Owner Participant is and will remain solvent and Borrower the Owner Participant will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become duedue subject, however, to the Owner Participant's rights to contest provided in the Operative Documents.
(gh) Borrower The Owner Participant has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Participation Agreement (American Financial Realty Trust)
Single Purpose Entity/Separateness. Borrower Trustor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Trustor does not own and will not own any asset or property other than (i) the PropertiesTrust Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesTrust Property.
(b) Borrower Trustor will not engage in any business other than the ownership, management and operation of the Properties Trust Property and Borrower Trustor will conduct and operate its business as presently conducted and operated.
(c) Borrower Trustor will not enter into any contract or agreement with any Affiliate affiliate of Borrowerthe Trustor, any constituent party of BorrowerTrustor, Guarantor any guarantor (a “Guarantor”) of the Debt or any Affiliate part thereof or any affiliate of any constituent party or Guarantor, except 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 any such party.
(d) Borrower Trustor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) unsecured trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementPremises. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageTrust Property.
(e) Borrower Trustor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower Trustor is and will remain solvent and Borrower Trustor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Trustor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, good standing and Borrower right to do business in the state where it is organized or registered and in the state where the Premises are located, and Trustor will not, nor and will Borrower not permit any SPC Entity its Governing Entity, or Guarantor (if Guarantor is other than a natural person), to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, articles or organization and operating agreement, certificate of organization, trust or other organizational documents of Borrower Trustor or such SPC the Governing Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterBeneficiary.
(h) Borrower Trustor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and and, unless treated as a division for tax purposes of another taxpayer, Trustor will file its own tax returns (returns, provided, however, that Trustor’s assets may be included in a consolidated financial statement with its affiliates provided that Borrower's financial statements and tax returns may the appropriate notations shall be prepared made on a consolidated basis with other entities provided that such consolidated financial statements and tax returns statement to indicate the separate existence separateness of Borrower Trustor and its such affiliates and to indicate that none of such affiliates assets and liabilities). Borrower credit are available to satisfy the debts and other obligations of Trusor.
(i) Trustor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Trustor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerTrustor, any constituent party of BorrowerTrustor, any Guarantor or any Affiliate affiliate of any constituent party of Trustor or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Trustor 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.
(kl) Borrower shall not Neither Trustor, Guarantor nor any Governing Entity of Trustor or Guarantor, will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of Borrowerthe Trustor, Guarantor or such Governing Entity.
(lm) Borrower Trustor will not commingle the funds and other assets of Borrower Trustor with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party of Trustor or Guarantor, or any other Personperson.
(mn) Borrower Trustor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party of Trustor or Guarantor, or any other Personperson.
(no) Borrower Trustor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower Trustor is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") its Governing Entity, shall be a corporation an entity whose sole asset is its interest in Borrower Trustor and the SPC each such Governing Entity will at all times comply, and will cause Borrower Trustor to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 Paragraph 9 as if such representation, warranty or covenant was made directly by such SPC Governing Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Mortgage Borrower is organized is and shall be limited solely to (i) owning, holding, selling, leasing, subleasing, transferring, exchanging, operating and managing the Property, (ii) entering into the Mortgage Loan Documents with Mortgage Lender, (iii) refinancing the Property in connection with a permitted repayment of the Mortgage Loan and (iv) transacting any and all lawful business for which a Person may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the Properties, Pledged Company Interests and (ii) incidental personal property necessary for the ownership of such interests. Mortgage Borrower does not own and will not own any asset or property other than (i) the Property, and (ii) incidental personal property necessary and convenient for and used or to be used in connection with the ownership or operation of the PropertiesProperty.
(bc) Mortgage Borrower will not engage in any business other than the ownership, management and operation purposes as set forth in clause (a) above. Borrower will not engage in any business other than the ownership of the Properties Pledged Company Interests and Borrower entering into the Loan Documents with Lender, and will conduct and operate its business as presently conducted and operated.
(cd) Borrower Other than the Management Agreement, neither Significant Party will not enter into any contract or agreement with any Affiliate of Borrowersuch Significant Party, any constituent party of Borrowersuch Significant Party, Guarantor any owner of such Significant Party, any guarantors of the obligations of such Significant Party or any Affiliate of any such constituent party party, owner or Guarantorguarantor (collectively, the "Related Parties"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than any not so affiliated with such partySignificant Party or such Related Parties.
(de) Borrower No Significant Party has not incurred and will not (and Borrower agrees it will not permit Mortgage Borrower to) incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) in the case of Borrower, the Debt and (ii) in the case of Mortgage Borrower, (A) the Mortgage Loan and (B) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided in no event shall such Indebtedness on this clause (ii)(B) (1) exceed, in the Guaranty aggregate, $4,000,000, (2) be evidenced by a note and (3) remain unpaid in excess of Payment and sixty (60) days from the Cash Management Agreementdate incurred (unless being contested in good faith by Mortgage Borrower). No Indebtedness other than the Debt Mortgage Loan may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProperty.
(ef) Borrower No Significant Party has not made and neither Significant Party will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party.
(fg) Borrower Each Significant Party is and will remain solvent and Borrower each Significant Party will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its their own assets as the same shall become due.
(gh) Borrower Each Significant Party has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will notno Significant Party will, nor will Borrower any Significant Party permit any SPC Entity to Affiliate of such Significant Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity Significant Party in any manner that would affect the status of Borrower or material respect which adversely affects such SPC Entity Significant Party's existence as a single- purpose, bankruptcy-remote entity, single purpose entity or its other obligations with respect to the Loan or Mortgage Loan without (i) the prior written consent of Lender or Mortgage Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letteras the case may be.
(hi) Borrower Each Significant Party will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and other Person and, except as required or permitted under GAAP, such Significant Party's assets will not be listed as assets on the financial statement of any other Person. Each Significant Party will file its own tax returns and will not file a consolidated federal income tax return with any other Person (provided except that Borrower's financial statements and tax returns such Significant Party may file or may be prepared on part of a consolidated basis with other entities provided federal tax return to the extent required or permitted by applicable law); provided, however, that such consolidated financial statements and tax returns indicate there shall be an appropriate notation indicating the separate existence of Borrower such Significant Party and its assets and liabilities). Borrower Each Significant Party shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Each Significant Party will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorother Related Party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checkschecks or clearly indicate its separate existence in any correspondence sent by it or on its behalf.
(jk) Borrower is adequately capitalized and Each Significant Party 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.
(kl) Borrower shall not No Significant Party nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of Borrower.
(l) Borrower will not commingle the funds and other material assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other PersonSignificant Party.
(m) Borrower has No Significant Party will commingle its assets with those of any other Person and each Significant Party will maintain hold all of its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.own name;
(n) Borrower No Significant Party will guarantee or become obligated for the debts of any other Person and each Significant Party does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") Each Significant Party shall be a corporation whose sole asset is its interest in Borrower and single-member limited liability company organized under the SPC Entity will at all times comply, and will cause Borrower to comply, with each laws of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC EntityState of Delaware.
(p) Borrower Each Significant Party shall at all times cause there to be at least one two duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time Independent Managers of such individual's appointmentSignificant Party (provided, however, that no Person may serve as an Independent Manager of both Borrower and Mortgage Borrower).
(q) Each Significant Party shall not be at allocate fairly and reasonably any time while serving as a director overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party.
(r) No Significant Party shall pledge its assets for the SPC Entity and has not been at benefit of any time during the preceding five (5) years other Person other than with respect to (i) a shareholder of, or an officer, director (with in the exception case of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, Loan and (ii) a customer of, or supplier to, in the case of Mortgage Borrower, the SPC Entity Mortgage Loan.
(s) Each Significant Party shall maintain a sufficient number of employees in light of its contemplated business operations or any Affiliate retain the services of either agents or consultants therefor and pay the salaries of themsuch employees, (iii) a Person controlling agents or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified consultants from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and funds.
(dt) Borrower shall conduct itself and cause any entity its business so that the assumptions made with respect to Borrower in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity Nonconsolidation Opinion shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entitytrue and correct in all material respects.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Prime Group Realty Trust)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for the ownership or operation of the Properties.
(b) Borrower will not engage in any business other than the ownership, management management, leasing and operation of the Properties Property and Borrower will conduct and operate its business as presently conducted and operated.
(cb) Borrower will not enter into any contract or agreement with any Affiliate affiliate of Borrower, any constituent party of Borrower, Guarantor the holder of any partnership or membership interest, any manager or the owner of any beneficial interest in Borrower (each, a "Beneficial Owner") or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gc) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existenceexistence including, without limitation, the holding of such annual and other meetings as are required by the Borrower's organizational documents, and Borrower will not, nor will Borrower permit any SPC Entity constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust certificate of organization, trust and agreement or other organizational documents of Borrower or such SPC Entity in constituent party or Beneficial Owner, if such amendments would violate any manner that would affect provision of the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entityProject Loan Documents, without (i) the prior written consent of Lender, in its sole discretion andwhich consent shall not be unreasonably withheld, nor will Borrower permit any constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, trust certificate and agreement or other organizational documents of such constituent party or Beneficial Owner, if such amendment, modification or change (i) would adversely affect the bankruptcy remote nature of Borrower; or (ii) if a Securitization has occurred, delivery would cause any of the assumptions upon which the Non-Consolidation Opinion is based to become inaccurate or untrue in any respect; or (iii) would adversely affect Lender's interest in the Project Loan. The Borrower shall deliver copies of minutes of annual meetings of the Borrower to the Lender within thirty (30) days of a No Downgrade Letterits receipt of written request therefore.
(hd) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)where required by applicable code or regulation. Borrower shall maintain its books, records, resolutions and agreements as official records. However, the Borrower does not and is not required to maintain its books in accordance with GAAP.
(ie) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor Beneficial Owner or any Affiliate of any constituent party or Guarantorparty), and shall conduct business in its own name and shall maintain and utilize separate stationery, invoices and checks. Borrower shall correct any known or unknown misunderstanding regarding its status as a separate entity, shall conduct business in its own name, entity and shall not identify itself as a division or part of its Affiliates or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checksBorrower.
(jf) Borrower is adequately capitalized 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.
(kg) Neither Borrower shall not nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of Borrower or the sale of all or substantially all of Borrower's or any constituent party's assets.
(lh) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(mi) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(nj) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(ok) If Borrower is a limited partnership or a (i) limited liability company, the partnership or business trust, at least one manager, managing partner, general partner or managing member trustee (the "SPC ENTITYMember") of Borrower shall itself be a limited liability company or corporation whose the sole asset of which is its interest in Borrower and which at all times has as one of its members or directors an individual who qualifies as an Independent Director, or (ii) corporation, at least one of its directors shall be an individual who qualifies as an Independent Director and who is a shareholder of such corporation, and the SPC Entity Member (in any case described in clause (i)), or the Independent Director (in any case described in clause (ii)), will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.40 5.4 as if such representation, warranty or covenant was made were made, mutatis mutandis, directly by such SPC EntityMember or Independent Director. In any case described in clause (i), the SPC Member and the Beneficial Owner, and in any case described in clause (ii), the Independent Director and the Beneficial Owner, shall cause the Borrower at all times to comply with each of the representations, warranties, and covenants contained in this Section 5.4.
(pl) Borrower shall not cause or permit the board of directors of Borrower or the SPC Member, as applicable, to take any action which, under the terms of any certificate of incorporation, by-laws, operating agreement or any voting trust agreement with respect to any common stock, requires the unanimous vote of the board of directors of Borrower or the general partners or members of Borrower or the SPC Member, as applicable, unless at all times cause the time of such action there to shall be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC EntityMember, as applicable, who is an Independent Director.
(m) The Borrower has not incurred and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to will not incur any indebtedness, dissolvesecured or unsecured, liquidatedirect or indirect, consolidate, merge and/or sell assets; absolute or contingent (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause including guaranteeing any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entityobligation), other than (i) the Project Loan or (ii) makes retail purchases unsecured trade debt customarily payable within thirty (30) days;
(n) The Borrower shall conduct its business so that the assumptions made with respect to the Borrower, in that certain opinion letter (the "Non-Consolidation Opinion") dated of vehicles from dealerships that even date herewith delivered by Dickinson Wright PLLC in connection with this Agreement are affiliates and shall xxxxxx xrxx xxx correct in all respects for the term of the SPC Entity or Borrower, or (iii) is employed by Project Loan Note. The Borrower shall deliver a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services certificate to the SPC EntityLender within 30 days upon written request from the Lender but not more frequently than on an annual basis except for good cause shown, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled certifying as to pay reasonable fees to the Independent Director for his or her services as a director its compliance with each of the SPC Entityprovisions of this Section 5.4.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower has not engaged in and will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower has not entered into and will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except upon terms and conditions that have been, are and shall be intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant provided such debt is not evidenced by a note and is paid within ninety (90) days after the date when due, and (iii) Debt incurred in the financing of equipment and other personal property used on the Project in the ordinary course of business of prudent hotel management for similar hotels to the Guaranty of Payment and the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and has not and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower has been, is and will remain solvent and Borrower has paid, and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same have become due and as same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower not permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of LenderLender which consent shall not be unreasonably withheld, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letterconditioned or delayed.
(h) Borrower has maintained, and will maintain maintain, all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided to the extent that Borrower's financial statements it is required to file any tax return, and tax returns may be prepared on file a consolidated basis federal income tax return with any other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)person as required by applicable law or in accordance with GAAP. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and at all times has held itself out and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate stationery, invoices and checks.
(j) Borrower is adequately capitalized has maintained, and will maintain 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower has not commingled and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson other than legally permissible and authorized distributions to equity owners.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower has not, does not not, and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or person except for guaranties issued in connection with the decisions or actions respecting the daily business or affairs of any other Person, except pursuant Franchise Agreement to the Guaranty franchisor or licensor thereunder in the ordinary course of Paymentbusiness of operating the Project.
(o) If Borrower is a limited partnership or a single member limited liability company, the general partner or managing member (the "SPC ENTITY") Borrower shall be a corporation whose sole asset is its interest in Borrower formed and the SPC Entity will at organized under Delaware law and otherwise comply with all times complyother Rating Agency criteria for single member limited liability companies (including, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrowerwithout limitation, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities inclusion of a Person, whether through ownership “springing member” and delivery of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior Delaware single member liability company opinions acceptable in all respects to Lender and to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityRating Agencies.
Appears in 1 contract
Samples: Loan Agreement (Winston Hotels Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Mortgagor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Mortgaged Property, (B) entering into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Mortgagor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesMortgaged Property.
(bc) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedMortgaged Property.
(cd) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, Guarantor any owner of the Mortgagor, the Guarantors (as hereinafter defined) or any Affiliate of affiliate or any constituent party or of Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Mortgagor or any such partyconstituent party of Mortgagor or any owner of Mortgagor.
(de) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion thereof, or by interests in the Mortgagor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementMortgagor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageMortgagor or any constituent entity thereof.
(ef) Borrower Mortgagor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor or any Affiliate of affiliate or any constituent party or of Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party .
(fg) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party of Mortgagor or any owner of Mortgagor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Mortgagee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Mortgagor's assets will not be listed as assets on the financial statement of any other entity. Mortgagor shall have its own separate financial statement, provided, however, that Mortgagor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles (“GAAP“), provided that such consolidated financial statement shall contain a footnote to the effect that Mortgagor's assets are owned by Mortgagor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Mortgagor's own separate balance sheet. Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on will not file a consolidated basis federal income tax return with any other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)corporation, except as otherwise required or prohibited under applicable state or federal laws. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records, except to the extent that Mortgagor is a disregarded entity under applicable or federal tax.
(ij) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or, any affiliate or any Affiliate of any constituent party or of Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Mortgagor.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor, or any Affiliate of affiliate or any constituent party or of Guarantor, or any other Person.
(m) Borrower has person, and will not participate in a cash management system with any such party; provided, however, Lender acknowledges that, provided no Event of Default has occurred, the tenants of the Mortgaged Property will make their payments to a property management account which distributes rents received. From such property management account, the applicable Manager pays applicable asset obligations (including, but not limited to payment of loan obligations such as debt service payments, payments of taxes, insurance, impounds, escrows and asset operating expenses). Although Mortgagee will allow Mortgagor to use this cash management system, it is solely for ease of cash administration/cash management and in no way lessen’s Mortgagor’s obligations to maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other PersonSingle Purpose Entity status.
(n) Borrower Mortgagor will not commingle its assets with those of any other person or entity and will hold all of its assets in its own name.
(o) Mortgagor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower Mortgagor is a limited partnership or a limited liability company, the at least one general partner or managing member (the "an “SPC ENTITY"Party“) shall be a corporation whose sole asset is its interest in Borrower Mortgagor, and the each such SPC Entity Party will at all times comply, and will shall cause Borrower Mortgagor to comply, with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 Paragraph 19 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(pq) Borrower Mortgagor shall at all times cause there 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.
(r) The stationery, invoices and checks utilized by Mortgagor or utilized to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who collect its funds or pay its expenses shall not have been at the time of such individual's appointment, bear its own name and shall not be at any time while serving as a director of bear the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family name of any other entity unless such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, entity is clearly designated as being Mortgagor's agent.
(1s) an individual that otherwise satisfies the foregoing Mortgagor shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on pledge its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC Entity, the Borrower or Loan.
(t) Mortgagor shall correct any affiliate of either of them, and known misunderstanding regarding its separate identity.
(2u) the SPC Entity Mortgagor shall be entitled to pay reasonable fees to the Independent Director for his or her services not identify itself as a director division of the SPC Entityany other person or entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does has not own and will shall not own any asset or property other than (i) the PropertiesProperty, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProperty. Notwithstanding the foregoing or anything herein to the contrary, Borrower hereby represents, warrants and covenants that (i) Borrower previously owned the sole membership interest in Ramco Jacksonville Annex LLC, a Michigan limited liability company (the "Annex"), (ii) the Annex's sole purpose was to own and operate a portion of the Property, (iii) the Annex had no debt other than a loan in favor of Borrower, which loan has been satisfied (the "Annex Loan"), (iv) on December 28, 2006 Annex merged into Borrower, (v) Annex has no outstanding contingent liabilities in connection with the Annex Loan, the Property or any other matters and (vi) Borrower has no outstanding contingent liabilities in connection with its ownership of the sole membership interest in Annex, except in connection with that certain lease of a portion of the Property to Gander Mountain Company, a Minnesota corporation.
(b) Borrower will has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Property and such activities as are necessary, incidental or appropriate in connection therewith, and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Borrower or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate. Borrower will appropriately document and accurately record on its books and records all contracts, business transactions and transfers between Borrower, on the one hand, and any of Ramco Partnership (as defined in Section 12 below), and/or the Ramco REIT (as defined in Section 12 below), on the other.
(d) Borrower has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt Debt; (ii) those certain loans in the aggregate amount of $100,672,375, which include (a) a construction loan made by JPMorgan Chase Bank, N.A. to Borrower on or about June 30, 2005, in the original principal amount of $58,772,375, and increased to the amount of $78,772,375 on or about January 31, 2007 (the "Construction Loan"), which Construction Loan was secured by a mortgage on the Property, (b) a mezzanine loan made by The Huntington Real Estate Investment Company to Borrower on or about December 14, 2005, in the original principal amount of $1,900,0000 (the "Huntington Loan"), which Huntington Loan was secured by a pledge of Guarantor's and Jacksonville River City Partners LLC's membership interest in Borrower and a second mortgage on the Property, and (iic) a mezzanine loan made by Guarantor to Borrower on or about September 26, 2006, in the original principal amount of $10,000,000, and increased to the amount of $20,000,000 on or about February 14, 2007 (the "Ramco Loan"), which Ramco Loan was originally secured by a pledge of Borrower's membership interest in Annex but became unsecured after Annex merged with Borrower; (iii)
(A) trade and operational debt incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Property, in such amounts as are normal and reasonable under the circumstances, except provided such debt is not evidenced by a promissory note or other security instrument and such trade and operational debt, together with any Permitted Equipment Leases, are not at any time in an aggregate amount in excess of two percent (2%) of the original loan amount evidenced by the Note and further provided that all such trade debts are paid within sixty (60) days after the same are incurred and all obligations of Borrower under construction contracts entered into by Borrower in connection with the Borrower's Construction Obligations (as defined in Section 68 hereof) and any alterations permitted pursuant to Section 10(b) hereof; (iv) Permitted Equipment Leases and (v) unsecured subordinated loans to Borrower (the Guaranty "Subordinated Loans", each a "Subordinated Loan") made by principals or Affiliates of Payment Borrower, provided that such loan or loans are made for the sole purpose of funding, and are used by Borrower solely for, working capital and/or otherwise to improve, alter and remodel the Cash Management AgreementProperty; provided, however, that Subordinated Loans shall be permitted only if and so long as each of the following conditions are satisfied:
(1) the payment terms of each Subordinate Loan shall not require payments to be made or payments to become due unless and until the Loan (or any refinancing loan the proceeds of which are used to repay the Loan) is fully paid and satisfied, except that voluntary payments by Borrower from excess cash flow from the Property may be permitted so long as no Event of Default has occurred and is continuing, (2) the aggregate outstanding balance of the Subordinated Loans and interest accrued and unpaid thereon together with the Debt (the "Total Debt Amount") shall not exceed 80% of the value of the Property (such value to be determined at the time each such Subordinated Loan is made); and (3) the lender under such Subordinated Loan shall, prior to making any Subordinate Loan advance, execute and deliver to and for the benefit of Lender a subordination and standstill agreement in the form of Exhibit E attached to the Closing Certificate (as defined in Subsection 8(f) above), and (4) all reasonable costs and expenses incurred by Lender in connection with such Subordinated Loans, including, but not limited to, the review of any and all materials required to be provided in connection therewith (including Lender's reasonable attorney's fees and expenses) shall be at the expense of Borrower and shall be paid by Borrower to Lender upon demand. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the PropertiesProperty. Borrower hereby represents and warrants that (i) the Huntington Loan and the Ramco Loan are being satisfied on the date hereof upon the funding of the Loan, (ii) the Construction Loan is being assigned to Lender and the Existing Indebtedness (except as set forth below) is consolidated with the New Indebtedness upon funding of the Loan and (iii) neither Borrower nor Guarantor have any remaining liabilities or obligations in connection with the Huntington Loan, the Ramco Loan or the Construction Loan (other than (A) environmental and other limited and customary indemnity obligations and (B) the Existing Indebtedness which is consolidated with the New Indebtedness and amended and restated pursuant to the Junior Mortgageterms hereof).
(e) Borrower has not made (except the Annex Loan) and will shall not make any loans or advances to Guarantor, or to any Affiliate or any constituent party of Borrower and Borrower has not and shall not make any loans or advances to any third party parties (including any Affiliate other than commercially reasonable tenant allowances, payments, contributions or constituent party, any Guarantor or any Affiliate reimbursements made by Borrower in the ordinary course of any constituent party or Guarantor), except business to a tenant pursuant to the Guaranty terms of Payment the applicable lease for construction by or as provided on behalf of such tenant of tenant improvements, and other than advances to or deposits with vendors or service providers at the Property made in the Cash Management Agreement, and shall not acquire obligations or securities ordinary course of its Affiliatesbusiness).
(f) Without intending to modify or diminish any limitations on recourse benefiting Borrower under this Mortgage or the other Loan Documents, Borrower is now and will intends to remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will shall do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity partner of Borrower to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, certificate of formation, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any a manner that which would adversely affect the status of Borrower or such SPC Entity Borrower's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will has maintained and shall maintain all of its booksfinancial statements, accounting records, financial statements books and records, bank accounts and other entity documents separate from those of its Affiliates and any constituent party of Borrower or any other person or entity, and Borrower has filed and shall file its own tax returns (provided that Borrower's financial statements and tax returns returns, if any, as may be prepared on required under applicable law, or if part of a consolidated basis with other entities provided that group filing, the Borrower is shown as a separate member of such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)group. Borrower has maintained and shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Borrower or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks. Borrower has allocated and shall allocate fairly and reasonably any overhead for shared office space.
(j) Borrower has preserved and kept and shall preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Property is adequately capitalized located and Borrower has observed and will observe all partnership, corporate or limited liability company formalities, as applicable.
(k) Borrower has maintained and shall maintain adequate capital and a sufficient number of employees, if any, 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 no additional capitalization shall be required to fund any principal, interest, or other debt requirements or other monetary obligations under the Loan Documents or the Loan. Borrower will pay the salaries of its own employees.
(kl) Neither Borrower nor any constituent party of Borrower has sought or, to the fullest extent permitted by law, shall not seek or consent to the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of Borrower, nor will Borrower merge with (except for the merger with Annex which has already occurred) or be consolidated into any other entity or acquire by purchase or otherwise all or substantially all of the business assets of, or any stock of beneficial ownership of, any entity.
(lm) Borrower will has not and shall not commingle the funds and other assets of Borrower with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Borrower or any other Personperson, and Borrower will pay its own liabilities out of its own funds and assets.
(mn) Borrower has maintained and will 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 Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Borrower, Affiliate, Guarantor or any other Personperson.
(no) Borrower does has not and will shall not assume, guarantee, become obligated for, pledge its assets as security for, for or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Borrower from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions property manager of the Property in respect of its duties regarding the Property or actions respecting from providing or holding itself out as responsible for commercially reasonable tenant improvement allowances, payments, contributions or reimbursements made by the daily Borrower in the ordinary course of business or affairs of any other Person, except to a tenant pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each terms of the representations, warranties, and covenants contained in this Section 3.1.40 as if applicable lease for construction by or on behalf of such representation, warranty or covenant was made directly by such SPC Entitytenant).
(p) Borrower shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of the board of directors its obligations under this Mortgage.
(an "INDEPENDENT DIRECTOR"q) of the SPC Entity who shall Borrower does not have been at the time of such individual's appointment, and shall not be at own any time while serving as a director of the SPC Entity and subsidiary, or make any investment in any person or entity.
(r) Borrower has not been at any time during and shall not without the preceding five unanimous consent of all its members, general partners or directors, as applicable (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the including all Independent Director of the SPC EntityDirectors), attorney, counsel, partner or employee of, Borrower, the SPC Entity or take any Affiliate of either of them, Material Action (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customeras hereinafter defined). As used herein, the term "controlMaterial Action" means the possessionshall mean to consolidate or merge Borrower with or into any Person, directly or indirectly, sell all or substantially all of the power to direct or cause the direction assets of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or to institute proceedings to have Borrower be 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 (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services similar official) of Borrower or a substantial part of its 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 take action in furtherance of any such action, or, to the SPC Entityfullest extent permitted by law, the Borrower dissolve or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entityliquidate Borrower.
Appears in 1 contract
Samples: Mortgage Agreement (Ramco Gershenson Properties Trust)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of Borrowerthe Mortgagor, any constituent party of BorrowerMortgagor, Guarantor any guarantor (a "Guarantor") of the Debt or any Affiliate part thereof or any affiliate of any constituent party or Guarantor, except 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 any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementPremises. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party or Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect the status of Borrower constituent party or such SPC Entity as a single- purpose, bankruptcy-remote entity, Guarantor without (i) the prior written consent of LenderMortgagee which consent shall not be unreasonably withheld, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letterconditioned or delayed.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)unless required otherwise by applicable law. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower Mortgagor is adequately capitalized 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.
(k) Borrower shall not seek Neither Mortgagor nor any constituent party will effectuate the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrowerthe Mortgagor.
(l1) Borrower Mortgagor will not tot commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or of Guarantor, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Cedar Income Fund LTD /Md/)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does Mortgagor has not own and will shall not own any asset or property other than (i) the PropertiesMortgaged Property and the Crossed Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property and the Crossed Property.
(b) Borrower will Mortgagor has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Mortgaged Property and Borrower the Crossed Property and such activities as are necessary, incidental or appropriate in connection therewith, and Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower will Mortgagor has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate. Mortgagor will appropriately document and accurately record on its books and records all contracts, business transactions and transfers between Mortgagor, on the one hand, and any of Ramco-Xxxxxxxxxx Properties, L.P., a Delaware limited partnership (the "Partnership"), Ramco-Xxxxxxxxxx, Inc., a Michigan corporation ("RG, Inc."), and/or the REIT (as defined in Section 12 below), on the other.
(d) Borrower Other than debt owed which shall be discharged and paid upon funding of the loan secured hereby, Mortgagor has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt; (ii) trade and operational debt 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, except pursuant 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 (A) the original loan amount evidenced by the Note with respect to trade and operational debt incurred with respect to the Guaranty Mortgaged Property and (B) the Crossed Loan amount with respect to trade and operational debt incurred with respect to the Crossed Property, and further provided that all such trade debts are paid within thirty (30) days after the same are incurred; and (iii) unsecured subordinated loans to Mortgagor (the "Subordinated Loans", each a "Subordinated Loan") made by the Partnership, provided that such loan or loans are made for the sole purpose of Payment funding, and are used by Mortgagor solely for, working capital and/or otherwise to improve, alter and remodel the Cash Management AgreementMortgaged Property and provided that Mortgagee consents to such improvement, alteration or remodeling, as applicable, such consent not to be unreasonably withheld; provided, however, that Subordinated Loans shall be permitted only if and so long as each of the following conditions are satisfied:
(1) the payment terms of each Subordinate Loan shall not require payments to be made or payments to become due unless and until the Loan (or any refinancing loan the proceeds of which are used to repay the Loan) is fully paid and satisfied, except that voluntary payments by Mortgagor from excess cash flow from the Mortgaged Property may be permitted so long as no Event of Default has occurred and is continuing, (2) the aggregate outstanding balance of the Subordinated Loans and interest accrued and unpaid thereon together with the Debt (the "Total Debt Amount") shall not exceed 80% of the value of the Mortgaged Property (such value to be determined at the time each such Subordinated Loan is made and to be determined based on an appraisal similar to the appraisal obtained at loan origination and otherwise in form and substance reasonably acceptable to Mortgagee, such appraisal also to take account of any increase in value created by any related expansion or remodeling; provided, however, that if the Total Debt Amount does not exceed 80% of $33,700,000 a new appraisal will not be required) and (3) the Partnership shall, prior to making any Subordinate Loan advance, execute and deliver to and for the benefit of Mortgagee a subordination and standstill agreement in the form of Exhibit E attached to that certain Closing Certificate dated as of the date hereof, executed by Mortgagor for the benefit of Mortgagee (the "Closing Certificate"), and (4) all reasonable costs and expenses incurred by Mortgagee in connection with such Subordinated Loans, including, but not limited to, the review of any and all materials required to be provided in connection therewith (including Mortgagee's reasonable attorney's fees and expenses) shall be at the expense of Mortgagor and shall be paid by Mortgagor to Mortgagee upon demand. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Without intending to modify or diminish any limitations on recourse benefiting Mortgagor under this Mortgage or the other Loan Documents, Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will shall do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, certificate of formation, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterMortgagee.
(h) Borrower will Mortgagor has maintained and shall maintain all of its booksfinancial statements, accounting records, financial statements books and records, bank accounts and other entity documents separate from those of its Affiliates and any constituent party of Mortgagor or any other person or entity, and Mortgagor has filed and shall file its own tax returns (provided that Borrower's financial statements and tax returns returns, if any, as may be prepared on required under applicable law, or if part of a consolidated basis with other entities provided that group filing, the Mortgagor is shown as a separate member of such consolidated financial statements group. Mortgagor has maintained and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor has been and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks. Mortgagor has allocated and shall allocate fairly and reasonably any overhead for shared office space.
(j) Borrower Mortgagor has preserved and kept and shall preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized located and Mortgagor has observed and will observe all partnership, corporate or limited liability company formalities, as applicable.
(k) Mortgagor has maintained and shall maintain adequate capital and a sufficient number of employees, if any, for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Mortgagor will pay the salaries of its own employees.
(kl) Borrower Neither Mortgagor nor any constituent party of Mortgagor has sought or shall not seek or consent to the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity or acquire by purchase or otherwise all or substantially all of the business assets of, or any stock of beneficial ownership of, any entity.
(lm) Borrower will Mortgagor has not and shall not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson, and Mortgagor will pay its own liabilities out of its own funds and assets.
(mn) Borrower Mortgagor has maintained and will 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 Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower does Mortgagor has not and will shall not assume, guarantee, become obligated for, pledge its assets as security for, for or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Mortgaged Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Mortgaged Property).
(p) Borrower Mortgagor shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of the board of directors its obligations under this Mortgage.
(an "INDEPENDENT DIRECTOR"q) of the SPC Entity who shall Mortgagor does not have been at the time of such individual's appointment, and shall not be at own any time while serving as a director of the SPC Entity and subsidiary, or make any investment in any person or entity.
(r) Mortgagor has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing and shall not be disqualified from serving as an Independent Director without the unanimous consent of the SPC Entity if such individualall its general partners, at directors or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entitymembers, as applicable, and providedfile or consent to the filing of any petition, inter aliaeither voluntary or involuntary, that it (a) is organized to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors.
(s) Mortgagor shall be a limited purpose liability company formed under the laws of owning the State of Delaware with one (1) member (the "Single Member"), whose certificate of formation and operating one or more properties or being an owner of one or more other entities that are so organized; agreement (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d"Mortgagor's Organizational Documents") shall conduct itself be in form and cause any entity in which it has an ownership interest substance reasonably satisfactory to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityMortgagee.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor the Guarantors or any Affiliate of any constituent party or Guarantor, except 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 any such partyPerson.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesAffiliates or any constituent party.
(f) Borrower is and will use best efforts to remain solvent and Borrower will pay pay, to the extent proceeds are available from the Project, its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower constituent party or such SPC Entity as a single- purpose, bankruptcy-remote entity, Guarantor without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationeryinvoices, invoices bank accounts and checks.
(j) Borrower is adequately capitalized and will maintain adequate capital capital, to the extent proceeds are available from the Project, for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Leasehold Deed to Secure Debt and Security Agreement (Meredith Enterprises Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Mortgagor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Mortgaged Property, (B) entering into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Mortgagor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesMortgaged Property.
(bc) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedMortgaged Property.
(cd) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, Guarantor any owner of the Mortgagor, the Guarantors (as hereinafter defined) or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Mortgagor or any such partyconstituent party of Mortgagor or any owner of Mortgagor.
(de) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion thereof, or by interests in the Mortgagor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementMortgagor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passuPARI PASSU) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageMortgagor or any constituent entity thereof.
(ef) Borrower Mortgagor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.affiliates or any constituent party . Loan No. 6518370
(fg) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party of Mortgagor or any owner of Mortgagor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Mortgagee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, records and financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Mortgagor's assets will not be listed as assets on the financial statement of any other entity except the ownership interests in Mortgagor may be listed as assets on the financial statements of the Trust. Mortgagor shall have its own separate financial statement, provided, however, that Mortgagor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles ("GAAP"), provided that such consolidated financial statement shall contain a footnote to the effect that Mortgagor's assets are owned by Mortgagor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Mortgagor's own separate balance sheet. Mortgagor will file its own tax returns (provided that Borrower's financial statements if required by law and will not file a consolidated federal income tax returns may return with any other corporation except the Trust in which case Mortgagor will be prepared shown on a separate schedule of such return as a separate member of the consolidated basis group with other entities provided that such consolidated its delineated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)information. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other except the Trust and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Mortgagor.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Loan No. 6518370 Mortgagor, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has person, except for the Manager, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower Mortgagor will not commingle its assets with those of any other person or entity except the Manager and will hold all of its assets in its own name or in its agent's name.
(o) Mortgagor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower Mortgagor is a limited partnership or a limited liability company, the at least one general partner or managing member (the an "SPC ENTITYPARTY") shall be a corporation or Delaware limited liability company whose sole asset is its interest in Borrower Mortgagor, and the each such SPC Entity Party will at all times comply, and will shall cause Borrower Mortgagor to comply, with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 PARAGRAPH 19 as if such representation, warranty or covenant was made directly by such SPC EntityParty; or in the alternative, if Mortgagor is a limited liability company organized under the laws of the State of Delaware which does not have an SPC Party as one of its members, then Mortgagor shall have an independent manager and Mortgagor shall cause to be delivered to Mortgagee such legal opinions with respect thereto from Delaware counsel reasonably satisfactory to Mortgagee that address such matters as may be required by Mortgagee or the Rating Agencies at such time.
(pq) Borrower Mortgagor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of Mortgagor, in the case of a corporation, and each SPC Entity Party in Mortgagor in the case of a limited partnership or limited liability company, in each case reasonably satisfactory to Mortgagee who shall is not have been at the time of such individual's initial appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years years; (ia) a shareholder ofstockholder, or an director, officer, director (with the exception of serving as the Independent Director employee, partner, attorney or counsel of the SPC Entity), attorney, counsel, partner or employee of, BorrowerParty, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iib) a customer ofcustomer, supplier or supplier to, Borrowerother person who derives more than ten percent (10%) of its purchases or revenues from its activities with the SPC Party, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iiic) a Person person or other entity controlling or under common control with any such shareholderstockholder, partner, customer, supplier or customer, other person; or (ivd) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecustomer, supplier or customerother person. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, .
(1r) an individual that otherwise satisfies the foregoing Mortgagor shall not be disqualified from serving as an Independent Director cause or permit the board of directors of any SPC Party in Mortgagor to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of each SPC Entity if such individual, Party in Mortgagor unless at or prior to the time of initial appointment, or such action there shall be at any time while serving as an Independent Director of the SPC Entity, (i) least one member who is an Independent Director of a Director. Loan No. 6518370
(s) Mortgagor shall conduct its business so that the assumptions made with respect to Mortgagor in that certain opinion letter dated June __, 2004 (the "special purpose entity" affiliated Non-Consolidation Opinion") delivered by Levenfeld Xxxxxxxxxx in connection with the Borrower or the SPC Entity Loan shall be true and correct in all respects.
(for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities t) Mortgagor shall allocate fairly and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness reasonably any overhead expenses that are substantially similar shared with an affiliate, including paying for office space and services performed by any employee of an affiliate.
(u) The stationery, invoices and checks utilized by Mortgagor or utilized to those collect its funds or pay its expenses shall bear its own name and shall not bear the name of the Borrower or the SPC Entity, any other entity unless such entity is clearly designated as applicable, and provided, inter alia, that it being Mortgagor's agent.
(av) is organized Mortgagor shall not pledge its assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC Entity, the Borrower or Loan.
(w) Mortgagor shall correct any affiliate of either of them, and known misunderstanding regarding its separate identity.
(2x) the SPC Entity Mortgagor shall be entitled to pay reasonable fees to the Independent Director for his or her services not identify itself as a director division of any other person or entity except for the SPC EntityTrust.
Appears in 1 contract
Samples: Mortgage (Inland Western Retail Real Estate Trust Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Borrower, Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, (ii) the Related Debt (hereinafter defined) and (iiiii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreementtrust, certificate of organization, trust operating agreement or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates and any constituent party of Mortgagor, and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsreturns.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower Mortgagor will preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized and located.
(k) Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party of Mortgagor will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson.
(mn) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person person other than the obligors under the Related Debt (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Mortgaged Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Mortgaged Property).
(p) Borrower Mortgagor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointmentobtain and maintain in full force and effect, and shall not be at any time while serving as a director of abide by and satisfy the SPC Entity material terms and has not been at any time during the preceding five (5) years (i) a shareholder conditions of, all material permits, licenses, registrations and other authorizations with or an officer, director (granted by any governmental authorities that may be required from time to time with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior respect to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent performance of its independent director; obligations under this Mortgage.
(q) Mortgagor will use separate checks, invoices and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entitystationery.
Appears in 1 contract
Samples: Mortgage and Security Agreement (Janus American Group Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, the Mortgaged Property (as defined in the Arizona Note), and the Mortgaged Property (as defined in the California Note) (collectively, the "Security Property"), and (ii) incidental personal property necessary for the ownership or operation of the PropertiesSecurity Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Security Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, the Debt (as defined in the Arizona Note), and the Debt (as defined in the California Note) (collectively the "Indebtedness"), and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness indebtedness other than the Debt Indebtedness may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates and any constituent party of Mortgagor, and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsreturns.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower Mortgagor will preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized and located.
(k) Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party of Mortgagor will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson.
(mn) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Security Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Security Property).
(p) Borrower Mortgagor shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of its obligations under this Mortgage.
(q) Since the formation of Mortgagor, Mortgagor has not owned any asset, conducted any business or operation, or engaged in any business other than the ownership and operation of the board Security Property. The Mortgagor has no debts or obligations other than normal trade accounts payable in the ordinary course of directors (an "INDEPENDENT DIRECTOR") business, and the Indebtedness. Any other indebtedness or obligation of Mortgagor has been paid in full prior to or through application of proceeds from funding of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityLoan.
Appears in 1 contract
Samples: Mortgage, Deed of Trust and Security Agreement (Concord Milestone Plus L P)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Mortgagor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Mortgaged Property, (B) entering into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Mortgagor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesMortgaged Property.
(bc) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedMortgaged Property.
(cd) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, Guarantor any owner of the Mortgagor, the Guarantors (as hereinafter defined) or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Mortgagor or any such partyconstituent party of Mortgagor or any owner of Mortgagor.
(de) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion thereof, or by interests in the Mortgagor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementMortgagor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passuPARI PASSU) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageMortgagor or any constituent entity thereof.
(ef) Borrower Mortgagor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.affiliates or any constituent party. Loan No. 6518291
(fg) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party of Mortgagor or any owner of Mortgagor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Mortgagee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, records and financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Mortgagor's assets will not be listed as assets on the financial statement of any other entity except the ownership interests in Mortgagor may be listed as assets on the financial statements of the Trust. Mortgagor shall have its own separate financial statement, provided, however, that Mortgagor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles ("GAAP"), provided that such consolidated financial statement shall contain a footnote to the effect that Mortgagor's assets are owned by Mortgagor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Mortgagor's own separate balance sheet. Mortgagor will file its own tax returns (provided that Borrower's financial statements if required by law and will not file a consolidated federal income tax returns may return with any other corporation except the Trust in which case Mortgagor will be prepared shown on a separate schedule of such return as a separate member of the consolidated basis group with other entities provided that such consolidated its delineated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)information. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other except the Trust and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Mortgagor.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Loan No. 6518291 Mortgagor, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has person, except for the Manager, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower Mortgagor will not commingle its assets with those of any other person or entity except the Manager and will hold all of its assets in its own name or in its agent's name.
(o) Mortgagor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower Mortgagor is a limited partnership or a limited liability company, the at least one general partner or managing member (the an "SPC ENTITYPARTY") shall be a corporation whose sole asset is its interest in Borrower Mortgagor, and the each such SPC Entity Party will at all times comply, and will shall cause Borrower Mortgagor to comply, with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 PARAGRAPH 19 as if such representation, warranty or covenant was made directly by such SPC EntityParty; or in the alternative, if Mortgagor is a limited liability company organized under the laws of the State of Delaware which does not have an SPC Party as one of its members, then Mortgagor shall have an independent manager and Mortgagor shall cause to be delivered to Mortgagee such legal opinions with respect thereto from Delaware counsel reasonably satisfactory to Mortgagee that address such matters as may be required by Mortgagee or the Rating Agencies at such time.
(pq) Borrower Mortgagor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of Mortgagor, in the case of a corporation, and each SPC Entity Party in Mortgagor in the case of a limited partnership or limited liability company, in each case reasonably satisfactory to Mortgagee who shall is not have been at the time of such individual's initial appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years years: (ia) a shareholder ofstockholder, or an director, officer, director (with the exception of serving as the Independent Director employee, partner, attorney or counsel of the SPC Entity), attorney, counsel, partner or employee of, BorrowerParty, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iib) a customer ofcustomer, supplier or supplier to, Borrowerother person who derives more than ten percent (10%) of its purchases or revenues from its activities with the SPC Party, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iiic) a Person person or other entity controlling or under common control with any such shareholderstockholder, partner, customer, supplier or customer, other person; or (ivd) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecustomer, supplier or customerother person. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, .
(1r) an individual that otherwise satisfies the foregoing Mortgagor shall not be disqualified from serving as an Independent Director cause or permit the board of directors of any SPC Party in Mortgagor to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of each SPC Entity if such individual, Party in Mortgagor unless at or prior to the time of initial appointment, or such action there shall be at any time while serving as an Independent Director of the SPC Entity, (i) least one member who is an Independent Director of a Director. Loan No. 6518291
(s) Mortgagor shall conduct its business so that the assumptions made with respect to Mortgagor in that certain opinion letter dated April __, 2004 (the "special purpose entity" affiliated Non-Consolidation Opinion") delivered by Levenfeld Xxxxxxxxxx in connection with the Borrower or the SPC Entity Loan shall be true and correct in all respects.
(for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities t) Mortgagor shall allocate fairly and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness reasonably any overhead expenses that are substantially similar shared with an affiliate, including paying for office space and services performed by any employee of an affiliate.
(u) The stationery, invoices and checks utilized by Mortgagor or utilized to those collect its funds or pay its expenses shall bear its own name and shall not bear the name of the Borrower or the SPC Entity, any other entity unless such entity is clearly designated as applicable, and provided, inter alia, that it being Mortgagor's agent.
(av) is organized Mortgagor shall not pledge its assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC Entity, the Borrower or Loan.
(w) Mortgagor shall correct any affiliate of either of them, and known misunderstanding regarding its separate identity.
(2x) the SPC Entity Mortgagor shall be entitled to pay reasonable fees to the Independent Director for his or her services not identify itself as a director division of any other person or entity except for the SPC EntityTrust or Partnership.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProjects, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProjects.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Projects and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProjects. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgageany Project.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor party or any Affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesAffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns returns, if any, as may be prepared on required under applicable law, to the extent not part of a consolidated basis with other entities provided that such group filing a consolidated financial statements return, and tax returns indicate the separate existence of Borrower and its assets and liabilities)pay any taxes so required to be paid under applicable law. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l1) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the each general partner or managing member (the "each, an “SPC ENTITY"Party”) shall be a corporation limited liability company whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 6.14 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors special manager (an "INDEPENDENT DIRECTOR"“Independent Director”) of the each SPC Entity Party in Borrower who shall not have been at the time of such individual's ’s appointment, and shall may not be at any time while serving as a director of the SPC Entity and has not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity)director, attorneypartner, counselmember, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themtheir Affiliates, (ii) affiliated with a customer of, or supplier to, Borrower, the SPC Entity Party, Borrower or any Affiliate of either of themtheir Affiliates, or (iii) a Person controlling or under common control with any such shareholderspouse, partnerparent, supplier or customersibling, child, or (iv) a member of the immediate other family relative of any such shareholder, officer, director, partner, employee, supplier person described by (i) or customer(ii) above. As used herein, the term "“Affiliate” means any Person other than the SPC Party (A) which owns beneficially, directly or indirectly, any outstanding shares of the SPC Party’s stock or interest in the Borrower or (B) which controls or is under common control with the SPC Party or the 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 or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does Mortgagor has not own and will shall not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower will Mortgagor has not and shall not engage in any business or activity other than the acquisition, ownership, management and operation of the Properties Mortgaged Property and Borrower such activities as are necessary, incidental or appropriate in connection therewith, and Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower will Mortgagor has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Other than debt owed which shall be discharged and paid upon funding of the loan secured hereby, Mortgagor has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) trade and operational debt 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 original loan amount evidenced by the Note, and further provided that all such trade debts are paid within thirty (30) days after the same are incurred and (iii) unsecured subordinated loans to Mortgagor (the "Subordinated Loans", each a "Subordinated Loan") made by Ramco-Gershenson Properties, L.P., a Delaware limited partnership (the "Paxxxxxxxxx"), provided that such loan or loans are
(1) the payment terms of each Subordinate Loan shall not require payments to be made or payments to become due unless and until the Loan (or any refinancing loan the proceeds of which are used to repay the Loan) is fully paid and satisfied, except pursuant that voluntary payments by Mortgagor from excess cash flow from the Mortgaged Property may be permitted so long as no (x) Event of Default or (y) Cash Management Event (as hereinafter defined) has occurred and is continuing, (2) the aggregate outstanding balance of the Subordinated Loans and interest accrued and unpaid thereon together with the Debt (the "Total Debt Amount") shall not exceed 80% of the value of the Mortgaged Property (such value to be determined at the time each such Subordinated Loan is made and to be determined based on an appraisal similar to the Guaranty appraisal obtained at loan origination and otherwise in form and substance reasonably acceptable to Mortgagee, such appraisal also to take account of Payment any increase in value created by any related expansion or remodeling; provided, however, that if the Total Debt Amount does not exceed 80% of $18,650,000.00, a new appraisal will not be required) and (3) the Cash Management AgreementPartnership shall, prior to making any Subordinate Loan advance, execute and deliver to and for the benefit of Mortgagee a subordination and standstill agreement in the form of Exhibit E attached to that certain Closing Certificate dated as of the date hereof, executed by Mortgagor for the benefit of Mortgagee (the "Closing Certificate"), and (4) all reasonable costs and expenses incurred by Mortgagee in connection with such Subordinated Loans, including, but not limited to, the review of any and all materials required to be provided in connection therewith (including Mortgagee's reasonable attorney's fees and expenses) shall be at the expense of Mortgagor and shall be paid by Mortgagor to Mortgagee upon demand. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Without intending to modify or diminish any limitations on recourse benefiting Mortgagor under this Mortgage or the other Loan Documents, Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for the ownership or operation of the Properties.
(b) Borrower will not engage in any business other than the ownership, management management, leasing and operation of the Properties Property and Borrower will conduct and operate its business as presently conducted and operated.
(cb) Borrower will not enter into any contract or agreement with any Affiliate affiliate of Borrower, any constituent party of Borrower, Guarantor the holder of any partnership or membership interest, any manager or the owner of any beneficial interest in Borrower (each, a "Beneficial Owner") or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gc) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existenceexistence including, without limitation, the holding of such annual and other meetings as are required by the Borrower's organizational documents, and Borrower will not, nor will Borrower permit any SPC Entity constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust certificate of organization, trust and agreement or other organizational documents of Borrower or such SPC Entity in constituent party or Beneficial Owner, if such amendments would violate any manner that would affect provision of the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entityProject Loan Documents, without (i) the prior written consent of Lender, in its sole discretion andwhich consent shall not be unreasonably withheld, nor will Borrower permit any constituent party or Beneficial Owner to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, trust certificate and agreement or other organizational documents of such constituent party or Beneficial Owner, if such amendment, modification or change (i) would adversely affect the bankruptcy remote nature of Borrower; or (ii) if a Securitization has occurred, delivery would cause any of the assumptions upon which the Non-Consolidation Opinion is based to become inaccurate or untrue in any respect; or (iii) would adversely affect Lender's interest in the Project Loan. The Borrower shall deliver copies of minutes of annual meetings of the Borrower to the Lender within thirty (30) days of a No Downgrade Letterits receipt of written request therefor.
(hd) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)where required by applicable code or regulation. Borrower shall maintain its books, records, resolutions and agreements as official records. However, the Borrower does not and is not required to maintain its books in accordance with GAAP.
(ie) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor Beneficial Owner or any Affiliate of any constituent party or Guarantorparty), and shall conduct business in its own name and shall maintain and utilize separate stationery, invoices and checks. Borrower shall correct any known or unknown misunderstanding regarding its status as a separate entity, shall conduct business in its own name, entity and shall not identify itself as a division or part of its Affiliates or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checksBorrower.
(jf) Borrower is adequately capitalized 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.
(kg) Neither Borrower shall not nor any constituent party will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of Borrower or the sale of all or substantially all of Borrower's or any constituent party's assets.
(lh) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(mi) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any GuarantorBeneficial Owner, or any Affiliate affiliate of any constituent party or GuarantorBeneficial Owner, or any other Person.
(nj) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(ok) If Borrower is a limited partnership or a (i) limited liability company, the partnership or business trust, at least one manager, managing partner, general partner or managing member trustee (the "SPC ENTITYMember") of Borrower shall itself be a limited liability company or corporation whose the sole asset of which is its interest in Borrower and which at all times has as one of its members or directors an individual who qualifies as an Independent Director, or (ii) corporation, at least one of its directors shall be an individual who qualifies as an Independent Director and who is a shareholder of such corporation, and the SPC Entity Member (in any case described in clause (i)), or the Independent Director (in any case described in clause (ii)), will at all times comply, and will cause Borrower to comply, comply with each of the representations, warranties, and covenants contained in this Section 3.1.40 5.4 as if such representation, warranty or covenant was made were made, mutatis mutandis, directly by such SPC EntityMember or Independent Director. In any case described in clause (i), the SPC Member and the Beneficial Owner, and in any case described in clause (ii), the Independent Director and the Beneficial Owner, shall cause the Borrower at all times to comply with each of the representations, warranties, and covenants contained in this Section 5.4.
(pl) Borrower shall not cause or permit the board of directors of Borrower or the SPC Member, as applicable, to take any action which, under the terms of any certificate of incorporation, by-laws, operating agreement or any voting trust agreement with respect to any common stock, requires the unanimous vote of the board of directors of Borrower or the general partners or members of Borrower or the SPC Member, as applicable, unless at all times cause the time of such action there to shall be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC EntityMember, as applicable, who is an Independent Director.
(m) The Borrower has not incurred and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to will not incur any indebtedness, dissolvesecured or unsecured, liquidatedirect or indirect, consolidate, merge and/or sell assets; absolute or contingent (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause including guaranteeing any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entityobligation), other than (i) the Project Loan or (ii) makes retail purchases unsecured trade debt customarily payable within thirty (30) days;
(n) The Borrower shall conduct its business so that the assumptions made with respect to the Borrower, in that certain opinion letter (the "Non-Consolidation Opinion") dated of vehicles from dealerships that even date herewith delivered by Xxxxxxxxx Xxxxxx PLLC in connection with this Agreement are affiliates and shall remain true and correct in all respects for the term of the SPC Entity or Borrower, or (iii) is employed by Project Loan Note. The Borrower shall deliver a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services certificate to the SPC EntityLender within 30 days upon written request from the Lender but not more frequently than on an annual basis except for good cause shown, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled certifying as to pay reasonable fees to the Independent Director for his or her services as a director its compliance with each of the SPC Entityprovisions of this Section 5.4.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, the Mortgaged Property (as defined in the Arkansas Note), and the Mortgaged Property (as defined in the Arizona Note) (collectively, the "Security Property"), and (ii) incidental personal property necessary for the ownership or operation of the PropertiesSecurity Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Security Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Xxxxxxxxx has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, the Debt (as defined in the Arkansas Note), and the Debt (as defined in the California Note (collectively, the "Indebtedness"),and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness indebtedness other than the Debt Indebtedness may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates and any constituent party of Mortgagor, and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsreturns.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower Mortgagor will preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized and located.
(k) Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party of Mortgagor will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson.
(mn) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Security Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Security Property).
(p) Borrower Mortgagor shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of its obligations under this Mortgage.
(q) Since the formation of Mortgagor, Mortgagor has not owned any asset, conducted any business or operation, or engaged in any business other than the ownership and operation of the board Security Property. The Mortgagor has no debts or obligations other than normal trade accounts payable in the ordinary course of directors (an "INDEPENDENT DIRECTOR") business, and the Indebtedness. Any other indebtedness or obligation of Xxxxxxxxx has been paid in full prior to or through application of proceeds from funding of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityLoan.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for the ownership or operation of the Properties.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantor, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- single-purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, the Mortgaged Property (as defined in the Arkansas Note), and the Mortgaged Property (as defined in the California Note) (collectively, the "Security Property"), and (ii) incidental personal property necessary for the ownership or operation of the PropertiesSecurity Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Security Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Xxxxxxxxx has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt, the Debt (as defined in the Arkansas Note), and the Debt (as defined in the California Note) (collectively, the "Indebtedness"), and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to the Guaranty of Payment and the Cash Management Agreement. No Indebtedness indebtedness other than the Debt Indebtedness may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates and any constituent party of Mortgagor, and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsreturns.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower Mortgagor will preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized and located.
(k) Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party of Mortgagor will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson.
(mn) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Security Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Security Property).
(p) Borrower Mortgagor shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of its obligations under this Mortgage.
(q) Since the formation of Mortgagor, Mortgagor has not owned any asset, conducted any business or operation, or engaged in any business other than the ownership and operation of the board Security Property. The Mortgagor has no debts or obligations other than normal trade accounts payable in the ordinary course of directors (an "INDEPENDENT DIRECTOR") business, and the Indebtedness. Any other indebtedness or obligation of Mortgagor has been paid in full prior to or through application of proceeds from funding of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityLoan.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does Mortgagor has not own and will shall not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower will Xxxxxxxxx has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate in all material respects its business as presently conducted and operated.
(c) Borrower will Mortgagor has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an armsarm's-length basis with third parties other than any such partyGuarantor or Affiliate.
(d) Borrower Mortgagor has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt 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, except pursuant to 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 Guaranty of Payment original loan amount evidenced by the Note, and further provided that all such trade debts are paid within sixty (60) days after the Cash Management Agreementsame are incurred. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Trustor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Trustor does not own and will not own any encumbered asset or property other than (i) the PropertiesTrust Property and the Other Mortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesTrust Property and the Other Mortgaged Property.
(b) Borrower Trustor will not engage in any business other than the ownership, management and operation of the Properties Trust Property and Borrower the Other Mortgaged Property (as hereinafter defined) and Trustor will conduct and operate its business as presently conducted and operated. Trustor shall not pledge its assets for the benefit of any other person or entity except as permitted under the Indenture.
(c) Borrower Trustor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerTrustor, any constituent party of BorrowerTrustor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar not less favorable to it than those that would be available on an arms-length basis with third parties other than any such party. Trustor 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.
(d) Borrower Trustor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Indebtedness, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in such amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is not outstanding for more than sixty (60) days (or such longer period as any such debt shall be contested by Trustor in good faith) and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementTrust Property (collectively, the "PERMITTED INDEBTEDNESS"). No Indebtedness Except as permitted under the Indenture, no indebtedness other than the Debt Indebtedness may be secured (subordinate or pari passuPARI PASSU) ---- ----- by all or any portion of the PropertiesTrust Property, except pursuant that debt incurred in the financing of equipment and other personal property used on the Trust Property in an amount not to the Junior Mortgageexceed $10,000 in any one (1) year may be secured by purchase money security interests on such equipment or personal property.
(e) Borrower Trustor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party and shall not hold evidence of indebtedness issued by any other person or entity (other than cash and investment-grade securities).
(f) Borrower Trustor is and will remain solvent and Borrower Trustor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Trustor has done or caused to be done and will do all things necessary to observe organizational corporate formalities and preserve its existence, and Borrower Trustor will not, nor will Borrower Trustor permit any SPC Entity constituent party or Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Trustor or such SPC Entity constituent party or Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Trustor's existence as a single- purpose, bankruptcy-remote entity, without (i) single purpose entity except as permitted or contemplated under the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterIndenture unless otherwise approved by the Rating Agencies.
(h) Borrower Trustor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Trustor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower Trustor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Trustor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerTrustor, any constituent party of BorrowerTrustor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(j) Borrower is adequately capitalized and Trustor 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.
(k) Borrower shall not Neither Trustor nor any constituent party will seek the dissolution, winding up, sale of assets, liquidation, consolidation or merger merger, in whole or in part, of BorrowerTrustor except as permitted under the Indenture.
(l) Borrower Trustor will not commingle the funds and other assets of Borrower Trustor with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Personperson.
(m) Borrower Trustor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Personperson.
(n) Borrower Trustor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person person or entity and does not and will not guarantee the decisions debts or actions respecting the daily business or affairs obligations of any other Person, except pursuant to the Guaranty of Paymentperson or entity.
(o) Trustor shall not hold out its credit as being available to satisfy the obligations of any other person or entity.
(p) Trustor shall maintain a sufficient number of employees in light of its contemplated business operations and shall pay the salaries of its own employees from its own funds.
(q) If Borrower Trustor is a limited partnership or a limited liability company, the each general partner or managing member (the each such general partner or managing member being an "SPC ENTITYMEMBER") shall be a corporation whose sole asset is its interest in Borrower Trustor, and the each such SPC Entity Member will at all times comply, and will shall cause Borrower Trustor to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 PARAGRAPH 19 as if such representation, warranty or covenant was made directly by such SPC EntityMember.
(pr) Borrower Trustor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTORDirector") of the each SPC Entity Member of Trustor reasonably satisfactory to Beneficiary who shall not have been at the time of such individual's appointment, and shall may not be at any time while serving as a director of the SPC Entity and has not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner officer or employee of, Borrower, the SPC Entity Trustor or any Affiliate of either of themits shareholders, subsidiaries or affiliates, (ii) a customer of, or supplier to, Borrower, the SPC Entity Trustor or any Affiliate of either of themits shareholders, subsidiaries or affiliates, (iii) a Person person or other entity controlling or under common control with any such shareholder, partner, supplier or customer, customer or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customercustomer of any other director of Trustor. 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 or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Other than any lease of a portion of the Mortgaged Property dated as of the date hereof, Mortgagor will not enter into any contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to ; and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementMortgaged Property. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterMortgagee.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns of Mortgagor (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate than any other maker of the separate existence of Borrower and its assets and liabilitiesNote). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks; provided, that such items may identify its relationship vis-a-vis the Guarantor.
(j) Borrower Mortgagor will preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized and located.
(k) Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party of Mortgagor will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity (other than any other maker of the Note).
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson (other than any other maker of the Note).
(mn) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of person (other than any other Personmaker of the Note) (provided, except pursuant to that the Guaranty foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the property manager of Paymentthe Mortgaged Property in respect of its duties regarding the Mortgaged Property).
(op) Mortgagor shall obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to time with respect to the performance of its obligations under this Mortgage.
(q) If Borrower Mortgagor is a limited partnership or a limited liability companypartnership, the each general partner or managing member (the each, an "SPC ENTITYParty") shall be a corporation whose sole asset is its interest in Borrower Mortgagor and the each such SPC Entity Party will at all times comply, and will cause Borrower Mortgagor to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 9 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(pr) Borrower Mortgagor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTORIndependent Director") of the Mortgagor and each SPC Entity Party in Mortgagor reasonably satisfactory to Mortgagee who shall not have been at the time of such individual's appointment, and shall may not be at any time while serving as a director of the SPC Entity and has not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counseldirector, partner or employee of, Borrower, the SPC Entity Mortgagor or any Affiliate of either its shareholders, subsidiaries or affiliates (other than any other maker of themthe Note or its corporate general partner, if applicable), (ii) a customer of, or supplier to, Borrower, the SPC Entity Mortgagor or any Affiliate of either of themits shareholders, subsidiaries or affiliates, (iii) a Person person or other entity controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customercustomer of Mortgagor. 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 or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party to materially amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (returns, provided that Borrower's financial statements and Borrower may file its tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)basis. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the each general partner or managing member (the each, an "SPC ENTITYParty") shall be a corporation limited liability company whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 6.14 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Grantor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Grantor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Trust Property, (B) entering into the Loan with the Grantee, (C) refinancing the Trust Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Grantor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Grantor does not own and will not own any asset or property other than (i) the PropertiesTrust Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesTrust Property.
(bc) Borrower Grantor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedTrust Property.
(cd) Borrower Grantor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerGrantor, any constituent party of BorrowerGrantor, Guarantor any owner of the Grantor, the Guarantors (as hereinafter defined) or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Grantor or any such partyconstituent party of Grantor or any owner of Grantor.
(de) Borrower Grantor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Trust Property, (ii) not secured by the Trust Property, or any portion thereof, or by interests in the Grantor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementGrantor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passuPARI PASSU) ---- ----- by the PropertiesTrust Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageGrantor or any constituent entity thereof.
(ef) Borrower Grantor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Grantor or any owner of Grantor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.affiliates or any constituent party. Loan No. 6518403
(fg) Borrower Grantor is and will remain solvent and Borrower Grantor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Grantor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Grantor will not, nor will Borrower Grantor permit any SPC Entity constituent party of Grantor or any owner of Grantor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Grantor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Grantee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Grantor will maintain all of its books, records, records and financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Grantor's assets will not be listed as assets on the financial statement of any other entity except the ownership interests in Grantor may be listed as assets on the financial statements of the Trust. Grantor shall have its own separate financial statement, provided, however, that Grantor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles ("GAAP"), provided that such consolidated financial statement shall contain a footnote to the effect that Grantor's assets are owned by Grantor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Grantor's own separate balance sheet. Grantor will file its own tax returns (provided that Borrower's financial statements if required by law and will not file a consolidated federal income tax returns may return with any other corporation except the Trust in which case Grantor will be prepared shown on a separate schedule of such return as a separate member of the consolidated basis group with other entities provided that such consolidated its delineated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)information. Borrower Grantor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Grantor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerGrantor, any constituent party of BorrowerGrantor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other except the Trust and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Grantor 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.
(kl) Borrower shall not Neither Grantor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Grantor.
(lm) Borrower Grantor will not commingle the funds and other assets of Borrower Grantor with those of any Affiliate affiliate or any constituent partyparty of Grantor or any owner of Grantor, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has person except for the Manager, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower Grantor will not commingle its assets with those of any other person or entity except the Manager and will hold all of its own name or in its agent's name. Loan No. 6518403
(o) Grantor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower Grantor is a limited partnership or a limited liability company, the at least one general partner or managing member (the an "SPC ENTITYPARTY") shall be a corporation or Delaware limited liability company whose sole asset is its interest in Borrower Grantor, and the each such SPC Entity Party will at all times comply, and will shall cause Borrower Grantor to comply, with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 PARAGRAPH 19 as if such representation, warranty or covenant was made directly by such SPC Entity.Party; or in the alternative, if Grantor is a limited liability company organized under the laws of the State of Delaware which does not have an SPC Party as one of its members, then Grantor shall have an independent manager and Grantor shall cause to be delivered to rantee such legal opinions with respect thereto from Delaware counsel reasonably satisfactory to Grantee that address such matters as may be required by Grantee or the Rating Agencies at such time..
(pq) Borrower Grantor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of Grantor, in the case of a corporation or Delaware limited liability company whose sole asset is its interest in Grantor, and each SPC Entity Party in Grantor in the case of a limited partnership or limited liability company, in each case reasonably satisfactory to Grantee who shall is not have been at the time of such individual's initial appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years years: (ia) a shareholder ofstockholder, or an director, officer, director (with the exception of serving as the Independent Director employee, partner, attorney or counsel of the SPC Entity), attorney, counsel, partner or employee of, BorrowerParty, the SPC Entity Grantor or any Affiliate affiliate of either of them, ; (iib) a customer ofcustomer, supplier or supplier to, Borrowerother person who derives more than ten percent (10%) of its purchases or revenues from its activities with the SPC Party, the SPC Entity Grantor or any Affiliate affiliate of either of them, ; (iiic) a Person person or other entity controlling or under common control with any such shareholderstockholder, partner, customer, supplier or customer, other person; or (ivd) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecustomer, supplier or customerother person. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, .
(1r) an individual that otherwise satisfies the foregoing Grantor shall not be disqualified from serving as an Independent Director cause or permit the board of directors of each SPC Party in Grantor to take any action which, under the terms of any certificate of incorporation, by-laws or any voting trust agreement with respect to any common stock, requires the vote of each SPC Entity if such individual, Party in Grantor unless at or prior to the time of initial appointment, or such action there shall be at any time while serving as an Independent Director of the SPC Entity, (i) least one member who is an Independent Director of a Director.
(s) Grantor shall conduct its business so that the assumptions made with respect to Grantor in that certain opinion letter dated June 30, 2004 (the "special purpose entity" affiliated Non-Consolidation Opinion") delivered by Levenfeld Xxxxxxxxxx in connection with the Borrower or the SPC Entity Loan shall be true and correct in all respects.
(for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities t) Grantor shall allocate fairly and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness reasonably any overhead expenses that are substantially similar shared with an affiliate, including paying for office space and services performed by any employee of an affiliate.
(u) The stationery, invoices and checks utilized by Grantor or utilized to those collect its funds or pay its expenses shall bear its own name and shall not bear the name of the Borrower or the SPC Entity, any other entity unless such entity is clearly designated as applicable, and provided, inter alia, that it being Grantor's agent.
(av) is organized Grantor shall not pledge its assets for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those benefit of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or and other services than with respect to the SPC Entity, the Borrower or Loan. Loan No. 6518403
(w) Grantor shall correct any affiliate of either of them, and known misunderstanding regarding its separate identity.
(2x) the SPC Entity Grantor shall be entitled to pay reasonable fees to the Independent Director for his or her services not identify itself as a director division of the SPC Entityany other person or entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited solely to (i) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Properties, (ii) entering into this Agreement with Lender, (iii) refinancing the Properties in connection with a permitted repayment of the Loan and (iv) transacting any and all lawful business for which a Borrower may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for and used or to be used in connection with the ownership or operation of the Properties.
(bc) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProperties.
(cd) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor any guarantors of the obligations of Borrower or any Affiliate of any constituent party party, owner or Guarantorguarantor (collectively, the "RELATED PARTIES"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties not so affiliated with Borrower or such Related Parties. Borrower will maintain an arm's length relationship with such Related Parties or any other than any such partyPerson.
(de) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) the Debt Loan and (ii) trade and operational debt incurred payables in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note, does not exceed $3,500,000.00 in the Guaranty aggregate, and is not in excess of Payment and the Cash Management Agreementsixty (60) days past due. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(ef) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party. Borrower will not form, acquire or hold any subsidiaries, or own or acquire any stock or equity interest in any Related Parties or any other Person (except that Borrower may invest in those investments permitted under the Loan Documents).
(fg) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own assets only, and as the same shall become due.
(gh) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to Related Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, Related Party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hi) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates any other Person and Borrower's assets will not be listed as assets on the financial statement of any constituent party and other Person except as otherwise required in accordance with GAAP. Borrower will file its own tax returns (provided to the extent required by applicable law; provided, however, that Borrower's financial statements assets and tax returns income may be prepared on included in a consolidated basis tax return of its parent companies if inclusion on such a consolidated tax return is required to comply with other entities provided that such consolidated financial statements and the requirements of applicable law or by reason of Borrower's being treated as a disregarded entity for Federal income tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordspurposes.
(ij) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorother Related Party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(jk) Borrower is adequately capitalized 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, except that no constituent party of Borrower shall be required to make any additional capital contributions to Borrower.
(kl) Neither Borrower shall not nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of material assets of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has will not commingle its assets with those of any other Person and will maintain hold all of its assets in its own name. Borrower will deposit all of its funds in checking accounts, savings accounts, time deposits or certificate deposits in its own name or invest such a manner that it will not be costly or difficult to segregate, ascertain or identify funds in its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Personown name.
(n) Borrower will not guarantee or become obligated for the debts of any other Person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Unless Borrower is a limited partnership or a single member limited liability companycompany formed under the laws of the State of Delaware, the general partner Borrower shall require that a Person holding an interest in Borrower be a corporation or managing member limited liability company (the "SPC ENTITYPARTY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity which will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 4.1.30 as if such representation, warranty or covenant was made directly by such Person. The structure of Borrower and the interest of the SPC EntityParty shall be reasonably acceptable to Lender and shall satisfy the requirements of the Rating Agencies for "single purpose, bankruptcy remote entities". Notwithstanding the foregoing so long as Borrower is a single member limited liability company formed under the laws of the State of Delaware and the organizational documents of Borrower as delivered to Lender in connection with the Closing are not modified, Borrower shall not be required to have an SPC Party and all provisions of this Agreement and the other Loan Documents pertaining to SPC Party shall be disregarded.
(p) Borrower shall at all times cause there to be at least one (1) duly appointed member members of the board of directors of the SPC Party or if Borrower is a single member Delaware limited liability company, its board of managers (an "INDEPENDENT DIRECTOR") of the SPC Entity reasonably satisfactory to Lender who shall not have been at the time of each such individual's respective appointment, and shall not be at any time while serving as a director of the SPC Entity Independent Director and has may not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counseldirector, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themits or their shareholders, subsidiaries or Affiliates, (ii) a customer of, or supplier to, Borrower, the or who derives any of its purchases or revenues from its activities with Borrower or SPC Entity Party (if applicable) or any Affiliate of either of themthem any of its or their shareholders, subsidiaries or Affiliates, (iii) a Person controlling or under common control with any such shareholder, partner, partner supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, customer of any other director of Borrower or the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwiseSPC Party (if applicable). Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, individual is at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC EntityDirector, (i) is an Independent Director independent director of a "special purpose entity" affiliated with Borrower. As used in this clause (p), the Borrower or the SPC Entity (for purposes of this paragraph, a term "special purpose entity" is shall mean an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and providedprovide, inter alia, that it it: (a) is organized for the a limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organizedpurpose; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; managers or independent directors and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," ", including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityPerson.
Appears in 1 contract
Samples: Loan Agreement (U-Store-It Trust)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited solely to (i) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Properties, (ii) entering into this Agreement with Lender, (iii) refinancing the Properties in connection with a permitted repayment of the Loan and (iv) transacting any and all lawful business for which a Borrower may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for and used or to be used in connection with the ownership or operation of the Properties.
(bc) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProperties.
(cd) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor any guarantors of the obligations of Borrower or any Affiliate of any constituent party party, owner or Guarantorguarantor (collectively, the "RELATED PARTIES"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties not so affiliated with Borrower or such Related Parties. Borrower will maintain an arm's length relationship with such Related Parties or any other than any such partyPerson.
(de) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) the Debt Loan and (ii) trade and operational debt incurred payables in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note, does not exceed $3,500,000.00 in the Guaranty aggregate, and is not in excess of Payment and the Cash Management Agreementsixty (60) days past due. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(ef) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party. Borrower will not form, acquire or hold any subsidiaries, or own or acquire any stock or equity interest in any Related Parties or any other Person (except that Borrower may invest in those investments permitted under the Loan Documents).
(fg) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own assets only, and as the same shall become due.
(gh) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to Related Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, Related Party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hi) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates any other Person and Borrower's assets will not be listed as assets on the financial statement of any constituent party and other Person except as otherwise required in accordance with GAAP. Borrower will file its own tax returns (provided to the extent required by applicable law; provided, however, that Borrower's financial statements assets and tax returns income may be prepared on included in a consolidated basis tax return of its parent companies if inclusion on such a consolidated tax return is required to comply with other entities provided that such consolidated financial statements and the requirements of applicable law or by reason of Borrower's being treated as a disregarded entity for Federal income tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordspurposes.
(ij) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorother Related Party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(jk) Borrower is adequately capitalized 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, except that no constituent party of Borrower shall be required to make any additional capital contributions to Borrower.
(kl) Neither Borrower shall not nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of material assets of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has will not commingle its assets with those of any other Person and will maintain hold all of its assets in its own name. Borrower will deposit all of its funds in checking accounts, savings accounts, time deposits or certificate deposits in its own name or invest such a manner that it will not be costly or difficult to segregate, ascertain or identify funds in its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Personown name.
(n) Borrower will not guarantee or become obligated for the debts of any other Person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Unless Borrower is a limited partnership or a single member limited liability companycompany formed under the laws of the State of Delaware, the general partner Borrower shall require that a Person holding an interest in Borrower be a corporation or managing member limited liability company (the "SPC ENTITYPARTY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity which will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 4.1.30 as if such representation, warranty or covenant was made directly by such Person. The structure of Borrower and the interest of the SPC EntityParty shall be reasonably acceptable to Lender and shall satisfy the requirements of the Rating Agencies for "single purpose, bankruptcy remote entities". Notwithstanding the foregoing so long as Borrower is a single member limited liability company formed under the laws of the State of Delaware and the organizational documents of Borrower as delivered to Lender in connection with the Closing are not modified, Borrower shall not be required to have an SPC Party and all provisions of this Agreement and the other Loan Documents pertaining to SPC Party shall be disregarded.
(p) Borrower shall at all times cause there to be at least one two (2) duly appointed member members of the board of directors of the SPC Party or if Borrower is a single member Delaware limited liability company, its board of managers (each an "INDEPENDENT DIRECTOR") of the SPC Entity reasonably satisfactory to Lender who shall not have been at the time of each such individual's respective appointment, and shall not be at any time while serving as a director of the SPC Entity Independent Director and has may not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counseldirector, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themits or their shareholders, subsidiaries or Affiliates, (ii) a customer of, or supplier to, Borrower, the or who derives any of its purchases or revenues from its activities with Borrower or SPC Entity Party (if applicable) or any Affiliate of either of themthem any of its or their shareholders, subsidiaries or Affiliates, (iii) a Person controlling or under common control with any such shareholder, partner, partner supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, customer of any other director of Borrower or the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwiseSPC Party (if applicable). Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, individual is at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC EntityDirector, (i) is an Independent Director independent director of a "special purpose entity" affiliated with Borrower. As used in this clause (p), the Borrower or the SPC Entity (for purposes of this paragraph, a term "special purpose entity" is shall mean an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and providedprovide, inter alia, that it it: (a) is organized for the a limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organizedpurpose; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; managers or independent directors and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," ", including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityPerson.
Appears in 1 contract
Samples: Loan Agreement (U-Store-It Trust)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower The purpose for which the Mortgagor is organized shall be limited solely to (A) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Mortgaged Property, (B) entering into the Loan with the Mortgagee, (C) refinancing the Mortgaged Property in connection with a permitted repayment of the Loan, and (D) transacting any and all lawful business for which a Mortgagor may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Mortgagor does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for and used in connection with the ownership or operation of the PropertiesMortgaged Property.
(bc) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedMortgaged Property.
(cd) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, Guarantor any owner of the Mortgagor, the Guarantors (as hereinafter defined) or any Affiliate affiliate of any constituent party or Guarantor, except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than not affiliated with the Mortgagor or any such partyconstituent party of Mortgagor or any owner of Mortgagor.
(de) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than the Loan and debt (i) the Debt and (ii) trade and operational debt incurred in the ordinary course of business with trade creditors to vendors and in amounts as are normal and reasonable under the circumstances, except pursuant suppliers of services to the Guaranty Mortgaged Property, (ii) not secured by the Mortgaged Property, or any portion thereof, or by interests in the Mortgagor or any constituent entity thereof, and (iii) not accompanied by any rights to control or to obtain control of Payment and the Cash Management AgreementMortgagor or any constituent entity thereof. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the PropertiesMortgaged Property, except pursuant to or any portion thereof, or by interests in the Junior MortgageMortgagor or any constituent entity thereof.
(ef) Borrower Mortgagor has not made and will not make any loans or advances to any third party entity or person (including any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party .
(fg) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party of Mortgagor or any owner of Mortgagor or any Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity in any manner that would affect constituent party or Guarantor without the status written consent of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without Mortgagee.
(i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party party. Subject to the immediately succeeding sentence, Mortgagor's assets will not be listed as assets on the financial statement of any other entity. Mortgagor shall have its own separate financial statement, provided, however, that Mortgagor's assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of generally accepted accounting principles ("GAAP"), provided that such consolidated financial statement shall contain a footnote to the effect that Mortgagor's assets are owned by Mortgagor and that they are being included on the financial statement of its parent solely to comply with the requirements of GAAP, and further provided that such assets shall be listed on Mortgagor's own separate balance sheet. Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns or may be prepared on file a consolidated basis federal income tax return with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)Dress Barn. Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(ij) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize separate telephone numbers, stationery, invoices and checks.
(jk) Borrower is adequately capitalized and Mortgagor 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.
(kl) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, or the sale of Borrowermaterial assets of Mortgagor.
(lm) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or any constituent partyparty of Mortgagor or any owner of Mortgagor, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has person, and will maintain its assets not participate in a cash management system with any such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower Mortgagor will not commingle its assets with those of any other person or entity and will hold all of its assets in its own name.
(o) Mortgagor will not guarantee or become obligated for the debts of any other entity or person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(op) If Borrower is Mortgagor shall be a limited partnership or a Delaware limited liability company, the general partner or managing member having either: (the "SPC ENTITY"i) a minimum of two (2) members, one of which shall be a corporation whose sole asset is its interest in Borrower Mortgagor (an "SPC Party"), and the each such SPC Entity Party will at all times comply, and will shall cause Borrower Mortgagor to comply, with each of the representations, warranties, warranties and covenants contained in this Section 3.1.40 Paragraph 19 as if such representation, warranty or covenant was made directly by such SPC EntityParty, or (ii) one member ("Sole Member") that is not required to be an SPC Party, and shall cause Mortgagor to comply with each of the representations, warranties and covenants contained in this Paragraph 19, provided that: (aa) Mortgagor shall have at least two (2) independent directors, each of which shall comply with all of the requirements of an Independent Director as set forth in subsection (q) below; (bb) upon the occurrence of any event that causes the Sole Member to cease to be a member of Mortgagor, each person then acting as an independent director of the Mortgagor shall automatically be admitted as a member of Mortgagor as a special member (a "Special Member"); (cc) no Special Member shall be permitted to resign from, or terminate its membership interest in, Mortgagor, or transfer its rights as a Special Member unless a successor person has become a member of Mortgagor as a Special Member; and (dd) the Special Members shall automatically cease to be members of Mortgagor upon the admission to Mortgagor of a substitute member or members in compliance with this subsection (p). The certificate of formation, operating agreement and all other organization documents of Mortgagor and all agreements affecting same, and all amendments, supplements or restatements of the same, and the form and substances of the same, shall be subject to the prior written approval of Mortgagee. In the event of the occurrence of any of the changes set forth in this subsection, Mortgagor shall furnish to Mortgagee, as a condition to any approval by Mortgagee, such certificates, documents, consents and legal opinions as may be required by Mortgagee or any rating agency.
(pq) Borrower Mortgagor shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTORIndependent Director") of Mortgagor, in the case of a corporation, and each SPC Entity Party in Mortgagor, if any is required under subsection (p) above, in the case of a limited partnership or limited liability company, in each case reasonably satisfactory to Mortgagee who shall is not have been at the time of such individual's initial appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years years: (ia) a shareholder ofstockholder, or an director, officer, director (with the exception of serving as the Independent Director employee, partner, attorney or counsel of the SPC Entity), attorney, counsel, partner or employee of, BorrowerParty, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iib) a customer ofcustomer, supplier or supplier to, Borrowerother person who derives more than ten percent (10%) of its purchases or revenues from its activities with the SPC Party, the SPC Entity Mortgagor or any Affiliate affiliate of either of them, ; (iiic) a Person person or other entity controlling or under common control with any such shareholderstockholder, partner, customer, supplier or customer, other person; or (ivd) a member of the immediate family of any such shareholderstockholder, director, officer, directoremployee, partner, employeecustomer, supplier or customerother person. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management management, policies or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Dress Barn Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor has not owned, does not own and will not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor has not engaged and will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of Borrowerthe Mortgagor, any constituent party of BorrowerMortgagor, Guarantor any guarantor (a "Guarantor") of the Debt or any Affiliate part thereof or any affiliate of any constituent party of Mortgagor or any Guarantor, except 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 any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) except for trade and operational debt payables incurred in the ordinary course of its business of owning and operating the Mortgaged Property, provided that such debt (i) is not evidenced by a note, (ii) is not outstanding for more than sixty (60) days from the date such trade payables were incurred, (iii) is with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to and (iv) does not exceed $260,000 in the Guaranty of Payment and the Cash Management Agreementaggregate. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent partyparty of Mortgagor, any Guarantor or any Affiliate of any affiliate or constituent party or of Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done affiliates or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsparty.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Charming Shoppes Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower Mortgagor does not own and will not own any encumbered asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate affiliate of Borrowerthe Mortgagor, any constituent party of BorrowerMortgagor, Guarantor any guarantor (a "Guarantor") of the Debt or any Affiliate part thereof or any affiliate of any constituent party or Guarantor, except 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 any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to and (iii) debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementPremises. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari @pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliates.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel including employment and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational corporate formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity constituent party or Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity constituent party or Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcy-remote single purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements books and records and bank accounts separate from those of its Affiliates affiliates and any constituent party and Mortgagor will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsreturns.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of BorrowerMortgagor, any constituent party of BorrowerMortgagor, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized and Mortgagor 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.
(k) Borrower shall not Neither Mortgagor nor any constituent party will seek the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of Borrowerthe Mortgagor.
(l) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Personperson.
(m) Borrower Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party or Guarantor, or any other Personperson.
(n) Borrower Mortgagor does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Ridgewood Properties Inc)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid when due, and (iii) Debt incurred in the Guaranty financing of Payment equipment and other personal property used on the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, LOAN AGREEMENT - Page 14 Fxxxx Xxxxxx Xxxs./78416 operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does Mortgagor has not own and will shall not own any asset or property other than (i) the PropertiesMortgaged Property and the Crossed Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property and the Crossed Property.
(b) Borrower will Mortgagor has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Mortgaged Property and Borrower the Crossed Property and such activities as are necessary, incidental or appropriate in connection therewith, and Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower will Mortgagor has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except 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 any such partyGuarantor or Affiliate. Mortgagor will appropriately document and accurately record on its books and records all contracts, business transactions and transfers between Mortgagor, on the one hand, and any of Ramco-Xxxxxxxxxx Properties, L.P., a Delaware limited partnership (the "Partnership"), Ramco-Xxxxxxxxxx, Inc., a Michigan corporation ("RG, Inc."), and/or the REIT (as defined in Section 12 below), on the other.
(d) Borrower Other than debt owed which shall be discharged and paid upon funding of the loan secured hereby, Mortgagor has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt; (ii) trade and operational debt 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, except pursuant 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 (A) the original loan amount evidenced by the Note with respect to trade and operational debt incurred with respect to the Guaranty Mortgaged Property and (B) the Crossed Loan amount with respect to trade and operational debt incurred with respect to the Crossed Property, and further provided that all such trade debts are paid within thirty (30) days after the same are incurred; and (iii) unsecured subordinated loans to Mortgagor (the "Subordinated Loans", each a "Subordinated Loan") made by the Partnership, provided that such loan or loans are made for the sole purpose of Payment funding, and are used by Mortgagor solely for, working capital and/or otherwise to improve, alter and remodel the Cash Management AgreementMortgaged Property and provided that Mortgagee consents to such improvement, alteration or remodeling, as applicable, such consent not to be unreasonably withheld; provided, however, that Subordinated Loans shall be permitted only if and so long as each of the following conditions are satisfied:
(1) the payment terms of each Subordinate Loan shall not require payments to be made or payments to become due unless and until the Loan (or any refinancing loan the proceeds of which are used to repay the Loan) is fully paid and satisfied, except that voluntary payments by Mortgagor from excess cash flow from the Mortgaged Property may be permitted so long as no Event of Default has occurred and is continuing, (2) the aggregate outstanding balance of the Subordinated Loans and interest accrued and unpaid thereon together with the Debt (the "Total Debt Amount") shall not exceed 80% of the value of the Mortgaged Property (such value to be determined at the time each such Subordinated Loan is made and to be determined based on an appraisal similar to the appraisal obtained at loan origination and otherwise in form and substance reasonably acceptable to Mortgagee, such appraisal also to take account of any increase in value created by any related expansion or remodeling; provided, however, that if the Total Debt Amount does not exceed 80% of $10,100,000 a new appraisal will not be required) and (3) the Partnership shall, prior to making any Subordinate Loan advance, execute and deliver to and for the benefit of Mortgagee a subordination and standstill agreement in the form of Exhibit E attached to that certain Closing Certificate dated as of the date hereof, executed by Mortgagor for the benefit of Mortgagee (the "Closing Certificate"), and (4) all reasonable costs and expenses incurred by Mortgagee in connection with such Subordinated Loans, including, but not limited to, the review of any and all materials required to be provided in connection therewith (including Mortgagee's reasonable attorney's fees and expenses) shall be at the expense of Mortgagor and shall be paid by Mortgagor to Mortgagee upon demand. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Without intending to modify or diminish any limitations on recourse benefiting Mortgagor under this Mortgage or the other Loan Documents, Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will shall do all things necessary necessary, to observe organizational formalities and preserve its existence, and Borrower Mortgagor will not, nor will Borrower Mortgagor permit any SPC Entity Guarantor to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, certificate of formation, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC Entity Guarantor in any a manner that which would adversely affect the status of Borrower or such SPC Entity Mortgagor's existence as a single- purpose, bankruptcysingle-remote purpose entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade LetterMortgagee.
(h) Borrower will Mortgagor has maintained and shall maintain all of its booksfinancial statements, accounting records, financial statements books and records, bank accounts and other entity documents separate from those of its Affiliates and any constituent party of Mortgagor or any other person or entity, and Mortgagor has filed and shall file its own tax returns (provided that Borrower's financial statements and tax returns returns, if any, as may be prepared on required under applicable law, or if part of a consolidated basis with other entities provided that group filing, the Mortgagor is shown as a separate member of such consolidated financial statements group. Mortgagor has maintained and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor has been and will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of BorrowerAffiliate, any constituent party of Borrower, any Guarantor Mortgagor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks. Mortgagor has allocated and shall allocate fairly and reasonably any overhead for shared office space.
(j) Borrower Mortgagor has preserved and kept and shall preserve and keep in full force and effect its existence, good standing and qualification to do business in the state in which the Mortgaged Property is adequately capitalized located and Mortgagor has observed and will observe all partnership, corporate or limited liability company formalities, as applicable.
(k) Mortgagor has maintained and shall maintain adequate capital and a sufficient number of employees, if any, for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations. Mortgagor will pay the salaries of its own employees.
(kl) Borrower Neither Mortgagor nor any constituent party of Mortgagor has sought or shall not seek or consent to the dissolution, dissolution or winding up, liquidation, consolidation or merger in whole or in part, of BorrowerMortgagor, nor will Mortgagor merge with or be consolidated into any other entity or acquire by purchase or otherwise all or substantially all of the business assets of, or any stock of beneficial ownership of, any entity.
(lm) Borrower will Mortgagor has not and shall not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent partyAffiliate, any Guarantor, or any Affiliate of any constituent party or Guarantor, of Mortgagor or any other Personperson, and Mortgagor will pay its own liabilities out of its own funds and assets.
(mn) Borrower Mortgagor has maintained and will 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 Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorof Mortgagor, Affiliate, Guarantor or any other Personperson.
(no) Borrower does Mortgagor has not and will shall not assume, guarantee, become obligated for, pledge its assets as security for, for or hold itself out to be responsible for the debts or obligations of any other Person person (provided, that the foregoing shall not prevent Mortgagor from being and holding itself responsible for expenses incurred or obligations undertaken by the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each property manager of the representations, warranties, and covenants contained Mortgaged Property in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entityrespect of its duties regarding the Mortgaged Property).
(p) Borrower Mortgagor shall at obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all times cause there material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to be at least one duly appointed member time with respect to the performance of the board of directors its obligations under this Mortgage.
(an "INDEPENDENT DIRECTOR"q) of the SPC Entity who shall Mortgagor does not have been at the time of such individual's appointment, and shall not be at own any time while serving as a director of the SPC Entity and subsidiary, or make any investment in any person or entity.
(r) Mortgagor has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing and shall not be disqualified from serving as an Independent Director without the unanimous consent of the SPC Entity if such individualall its general partners, at directors or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entitymembers, as applicable, and providedfile or consent to the filing of any petition, inter aliaeither voluntary or involuntary, that it (a) is organized to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors.
(s) Mortgagor shall be a limited purpose liability company formed under the laws of owning the State of Delaware with one (1) member (the "Single Member"), whose certificate of formation and operating one or more properties or being an owner of one or more other entities that are so organized; agreement (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d"Mortgagor's Organizational Documents") shall conduct itself be in form and cause any entity in which it has an ownership interest substance reasonably satisfactory to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntityMortgagee.
Appears in 1 contract
Single Purpose Entity/Separateness. Borrower representsEach Mortgagor represents and warrants severally as to itself only, ---------------------------------- warrants and not jointly and severally as to any other Mortgagor, to Mortgagee and covenants with Mortgagee as follows:
(a) Borrower Mortgagor does not own and will not own own, and since the date of its formation has not owned, any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage engage, and since the date of its formation has not engaged, in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party Mortgagor or Guarantor, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an armsainis-length basis with third parties other than any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) unsecured trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstancescircumstances and such debt is not evidenced by a promissory note executed by Mortgagor, except pursuant (iii) debt incurred in the ordinary course of Mortgagor's business to finance equipment and other personal property used on the Guaranty Premises the removal of Payment which would not materially damage the Improvements or materially impair the value of the Improvements, provided that such debt is not evidenced by a promissory note executed by Mortgagor and is not secured by any property other than the Cash Management Agreementitem of equipment or personal property so financed; and (iv) payment of the preferred equity permitted under Subparagraph (g) above. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or and any Affiliate of any constituent party Mortgagor or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesGuarantor or any Affiliate of Mortgagor or Guarantor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, good standing and Borrower right to do business in the state where it is organized or registered and in the state where the Premises are located, and Mortgagor will not, nor and will Borrower permit any SPC Entity not peitilit its Governing Entity, to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylawsorganization, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC the Governing Entity in any manner that would affect either amend or modify the status terms of Borrower the preferred equity referred to in Paragraph 8(0 above or such SPC cause Mortgagor or the Governing Entity as a single- purpose, bankruptcy-remote entityto be violation of any other provision of this Paragraph 9, without (i) the prior written consent of LenderMortgagee, in its sole discretion andwhich consent will not be unreasonably withheld, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letterdelayed or conditioned.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Guarantor and the Affiliates of Mortgagor and any constituent party Guarantor, and Mortgagor will file its own tax returns (provided except that Borrower's financial statements and as long as Mortgagor is a disregarded entity for United States federal income tax returns may purposes Mortgagor will be prepared on shown as a separate member of the consolidated basis with other entities provided that such consolidated financial statements and group of which Mortgagor is a part for United States federal income tax returns indicate the separate existence of Borrower and its assets and liabilitiespurposes). Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity person (including Guarantor and any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Mortgagor and Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized and . Mortgagor will maintain adequate capital for the normal nomial obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage Agreement (American Realty Capital Healthcare Trust Inc)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) The purpose for which Borrower is organized is and shall be limited solely to (i) owning, holding, selling, leasing, transferring, exchanging, operating and managing the Properties, (ii) entering into this Agreement with Lender, (iii) refinancing the Properties in connection with a permitted repayment of the Loan and (iv) transacting any and all lawful business for which a Borrower may be organized under its constitutive law that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or property other than (i) the Properties, and (ii) incidental personal property necessary for and used or to be used in connection with the ownership or operation of the Properties.
(bc) Borrower will not engage in any business other than the ownership, management and operation of the Properties and Borrower will conduct and operate its business as presently conducted and operatedProperties.
(cd) Borrower will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor any guarantors of the obligations of Borrower or any Affiliate of any constituent party party, owner or Guarantorguarantor (collectively, the "RELATED PARTIES"), except upon terms and conditions that are intrinsically fair fair, commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties not so affiliated with Borrower or such Related Parties. Borrower will maintain an arm's length relationship with such Related Parties or any other than any such partyPerson.
(de) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Indebtedness other than (i) the Debt Loan and (ii) trade and operational debt incurred payables in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note, does not exceed $4,000,000.00 in the Guaranty aggregate, and is not in excess of Payment and the Cash Management Agreementsixty (60) days past due. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior Mortgage.
(ef) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, Person and shall not acquire obligations or securities of its Affiliatesany Related Party. Borrower will not form, acquire or hold any subsidiaries, or own or acquire any stock or equity interest in any Related Parties or any other Person (except that Borrower may invest in those investments permitted under the Loan Documents).
(fg) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(gh) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to Related Party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, Related Party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(hi) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates any other Person and Borrower's assets will not be listed as assets on the financial statement of any constituent party and other Person. Borrower will file its own tax returns (provided provided, however, that Borrower's financial statements assets and tax returns income may be prepared on included in a consolidated basis tax return of its parent companies if inclusion on such a consolidated tax return is required to comply with other entities provided that such consolidated financial statements and tax returns indicate the separate existence requirement of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official recordsGAAP or any applicable law.
(ij) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity Person (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorother Related Party), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(jk) Borrower is adequately capitalized 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, except that no constituent party of Borrower shall be required to make any additional capital contributions to Borrower.
(kl) Neither Borrower shall not nor any Related Party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, or the sale of material assets of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has will not commingle its assets with those of any other Person and will maintain hold all of its assets in its own name. Borrower will deposit all of its funds in checking accounts, savings accounts, time deposits or certificate deposits in its own name or invest such a manner that it will not be costly or difficult to segregate, ascertain or identify funds in its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Personown name.
(n) Borrower will not guarantee or become obligated for the debts of any other Person and does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be as being responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Unless Borrower is a limited partnership or a single member limited liability companycompany formed under the laws of the State of Delaware, the general partner Borrower shall require that a Person holding an interest in Borrower be a corporation or managing member limited liability company (the "SPC ENTITYPARTY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity which will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 4.1.30 as if such representation, warranty or covenant was made directly by such Person. The structure of Borrower and the interest of the SPC EntityParty shall be reasonably acceptable to Lender and shall satisfy the requirements of the Rating Agencies for "single purpose, bankruptcy remote entities". Notwithstanding the foregoing so long as Borrower is a single member limited liability company formed under the laws of the State of Delaware and the organizational documents of Borrower as delivered to Lender in connection with the Closing are not modified, Borrower shall not be required to have an SPC Party and all provisions of this Agreement and the other Loan Documents pertaining to SPC Party shall be disregarded.
(p) Borrower shall at all times cause there to be at least one (1) duly appointed member members of the board of directors of the SPC Party or if Borrower is a single member Delaware limited liability company, its board of managers (an "INDEPENDENT DIRECTOR") of the SPC Entity reasonably satisfactory to Lender who shall not have been at the time of each such individual's respective appointment, and shall not be at any time while serving as a director of the SPC Entity Independent Director and has may not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counseldirector, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themits or their shareholders, subsidiaries or Affiliates, (ii) a customer of, or supplier to, Borrower, the or who derives any of its purchases or revenues from its activities with Borrower or SPC Entity Party (if applicable) or any Affiliate of either of themthem any of its or their shareholders, subsidiaries or Affiliates, (iii) a Person controlling or under common control with any such shareholder, partner, partner supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, customer of any other director of Borrower or the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwiseSPC Party (if applicable). Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, individual is at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC EntityDirector, (i) is an Independent Director independent director of a "special purpose entity" affiliated with Borrower. As used in this clause (p), the Borrower or the SPC Entity (for purposes of this paragraph, a term "special purpose entity" is shall mean an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and providedprovide, inter alia, that it it: (a) is organized for the a limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organizedpurpose; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; managers or independent directors and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," ", including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person Person.
(q) Borrower shall not cause or entity), (ii) makes retail purchases permit the board of vehicles from dealerships that are affiliates directors of the SPC Entity or BorrowerParty to take any action which, or (iii) is employed by a company that provides independent director services to corporationsunder the terms of any certificate of incorporation, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower by-laws or any affiliate voting trust agreement with respect to any common stock, requires a vote of either the board of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director directors of the SPC EntityParty of Borrower unless at the time of such action there shall be at least one member who is an Independent Director.
(r) Borrower shall 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 or Related Party.
(s) Borrower shall not pledge its assets for the benefit of any other Person other than with respect to the Loan.
(t) Borrower shall maintain a sufficient number of employees in light of its contemplated business operations and pay the salaries of its own employees from its own funds.
(u) Borrower shall conduct its business so that the assumptions made with respect to Borrower in the Insolvency Opinion, a true copy of which is attached as Schedule 4.1.30 attached hereto, shall be and remain true and correct in all respects.
Appears in 1 contract
Samples: Loan Agreement (U-Store-It Trust)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower has not owned, does not own own, and will not own any asset or property other than (i) the PropertiesProject, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProject.
(b) Borrower has not engaged in and will not engage in any business other than the ownership, management and operation of the Properties Project and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower has not entered into and will not enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party or Guarantorparty, except upon terms and conditions that have been, are and shall be intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any such party.
(d) Borrower has not incurred and will not incur any Indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), Debt other than (i) the Debt and Loan, (ii) trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstances, except pursuant to provided such debt is not evidenced by a note and is paid within sixty (60) days after the Guaranty date when due, and (iii) Debt incurred in the financing of Payment equipment and other personal property used on the Cash Management AgreementProject. No Indebtedness indebtedness other than the Debt Loan may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProject.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor party or any Affiliate affiliate of any constituent party or Guarantorparty), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and has not and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower has been, is and will remain solvent and Borrower has paid, and will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its own funds and assets as the same have become due and as same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor not and will Borrower not permit any SPC Entity constituent party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, constituent party without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower has maintained, and will maintain maintain, all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and Borrower will file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities)returns. Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower has been and will be, and at all times has held itself out and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantorparty), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize a separate telephone number, if any, and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized has maintained, and will maintain 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.
(k) Neither Borrower shall not nor any constituent party will seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of the Borrower.
(l) Borrower has not commingled and will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantorparty, or any other Personperson.
(n) Borrower has not, does not not, and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a limited liability company, the each general partner or managing member (the each, an "SPC ENTITYPARTY") shall be a corporation whose sole asset is its interest in Borrower and the each such SPC Entity Party will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 6.14 as if such representation, warranty or covenant was made directly by such SPC EntityParty.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the each SPC Entity Party in Borrower who shall not have been at the time of such individual's appointment, and shall may not be at any time while serving as a director of the SPC Entity and has not have been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity)director, attorneypartner, counselmember, partner or employee of, Borrower, the SPC Entity Borrower or any Affiliate of either of themtheir Affiliates, (ii) affiliated with a customer of, or supplier to, Borrower, the SPC Entity Party, Borrower or any Affiliate of either of themtheir Affiliates, or (iii) a Person controlling spouse, parent, sibling, child, or other family relative of any person described by (i) or (ii) above. As used herein, the term "AFFILIATE" means any person or entity other than the SPC Party (i) which owns beneficially, directly or indirectly, any outstanding shares of the SPC Party's stock or interest in the Borrower or (ii) which controls or is under common control with any such shareholder, partner, supplier the SPC Party or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customerBorrower. 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 or activities of a Personperson or entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Loan Agreement (Equity Inns Inc)
Single Purpose Entity/Separateness. Borrower represents, ---------------------------------- warrants and covenants as follows:
(a) Borrower does not own and will not own any asset or property other than (i) the PropertiesProperty, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesProperty.
(b) Borrower will not engage in any business other than the ownership, management and operation of the Properties Property and Borrower will conduct and operate its business as presently conducted and operated.
(c) Borrower will not enter into any contract or agreement with any Affiliate affiliate of the Borrower, any constituent party of Borrower, Guarantor any guarantor (a “Guarantor”) of the Debt or any Affiliate part thereof or any affiliate of any constituent party or Guarantor, except 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 any such party.
(d) Borrower has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) unsecured trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstancescircumstances and such debt is not evidenced by a promissory note executed by Xxxxxxxx, except pursuant provided that the outstanding amount of such trade and operational debt shall never be more than four percent (4%) of the stated principal sum of the Note at any one time and Borrower covenants to pay all such trade and operational debt within sixty (60) days of the Guaranty date the same is incurred, and (iii) debt incurred in the ordinary course of Payment Borrower’s business to finance equipment and other personal property used on the Cash Management AgreementPremises the removal of which would not materially damage the Improvements or materially impair the value of the Improvements, provided that such debt is not evidenced by a promissory note executed by Xxxxxxxx or is secured by any property other than the item of equipment or personal property so financed. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageProperty.
(e) Borrower has not made and will not make any loans or advances to any third party (including any Affiliate affiliate or constituent party, any Guarantor or any Affiliate affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its Affiliatesaffiliates or any constituent party.
(f) Borrower is and will remain solvent and Borrower will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, good standing and right to do business in the state where it is organized or registered and in the state where the Premises are located, and Borrower will not, nor and will Borrower not permit any SPC its Governing Entity or Guarantor if Guarantor is other than a natural person), to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, articles or organization and operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entityGoverning Entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates affiliates and any constituent party and Borrower will file its own tax returns (returns, provided, however, that Xxxxxxxx’s assets may be included in a consolidated financial statement with its affiliates provided that Borrower's financial statements and tax returns may the appropriate notations shall be prepared made on a consolidated basis with other entities provided that such consolidated financial statements and tax returns statement to indicate the separate existence separateness of Borrower and its such affiliates and to indicate that none of such affiliates assets and liabilities). Borrower shall maintain its books, records, resolutions credit are available to satisfy the debts and agreements as official recordsother obligations of Borrower.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate affiliate of any constituent party of Borrower or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates affiliates as a division or part of the other and shall maintain and utilize a separate telephone number and separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Neither Borrower, Guarantor nor any Governing Entity of Borrower shall not or Guarantor, will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of the Borrower, Guarantor or such Governing Entity.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party of Borrower or Guarantor, or any other Personperson.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate affiliate or constituent party, any Guarantor, or any Affiliate affiliate of any constituent party of Borrower or Guarantor, or any other Personperson.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Paymentperson.
(o) If Borrower is a limited partnership or a single-member limited liability company, the general partner or managing member (i) Borrower’s operating agreement (the "SPC ENTITY"“LLC Agreement”) provides for the continued existence of Borrower in the event of the bankruptcy or dissolution of the sole member, and (ii) Borrower has furnished to Lender as of the date of this Security Deed an opinion of counsel reasonably acceptable to Lender and its counsel that (i) Borrower is a legal entity formed in the state of its organization; (ii) the LLC Agreement constitutes a legal, valid and binding agreement of the sole member and is enforceable against the sole member in accordance with its terms; (iii) under the law of the state in which Borrower has been organized Borrower is a separate legal entity and the existence of Borrower as a separate legal entity shall continue until the cancellation of Borrower’s articles of organization; (iv) the LLC Agreement provides for the continued existence of Borrower in the event of the bankruptcy or dissolution of the sole member, and such provisions would be enforceable under the laws of the state in which Borrower has been organized notwithstanding the bankruptcy or dissolution of the sole member; (v) no creditor of the sole member shall have any right to satisfy its claim against sole member by obtaining possession of, or otherwise realizing upon, the Property or any other assets of Borrower; (vi) if properly presented to a corporation whose state court in the state in which Borrower has been organized, such state court applying such state’s law, would conclude that until such time that no amounts remain due and payable and no obligations remain outstanding under the Loan Documents, in order for a person to file a voluntary bankruptcy petition on behalf of Xxxxxxxx, the unanimous vote of the individuals serving as the managers of Borrower or as the managers or directors of Borrower’s Governing Entity or of the sole asset member or of the sole member’s Governing Entity, as the case may be, is its interest in required; and (vii) although on application to a court of competent jurisdiction a judgment creditor of the sole member may be able to charge the sole member’s share of any profits and losses of Borrower and the SPC Entity will at all times comply, sole member’s right to receive distributions of Borrower’s assets (the “Sole Member’s Interest”) and will cause Borrower to comply, with each the court may appoint a receiver of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member share of the board distributions due or to become due to the sole member in respect of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate receiver shall have only the rights of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member an assignee of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC EntitySole Member’s Interest.
Appears in 1 contract
Samples: Deed to Secure Debt, Assignment of Rents and Security Agreement (NNN Healthcare/Office REIT, Inc.)
Single Purpose Entity/Separateness. Borrower representsEach Mortgagor represents and warrants severally as to itself only, ---------------------------------- warrants and not jointly and severally as to any other Mortgagor, to Mortgagee and covenants with Mortgagee as follows:
(a) Borrower Mortgagor does not own and will not own own, and since the date of its formation has not owned, any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower Mortgagor will not engage engage, and since the date of its fonuation has not engaged, in any business other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate its business as presently conducted and operated.
(c) Borrower Mortgagor will not enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower, Guarantor or any Affiliate of any constituent party Mortgagor or Guarantor, except 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 any such party.
(d) Borrower Mortgagor has not incurred and will not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and Debt, (ii) unsecured trade and operational debt incurred in the ordinary course of business with trade creditors and in amounts as are normal and reasonable under the circumstancescircumstances and such debt is not evidenced by a promissory note executed by Mortgagor, except pursuant (iii) debt incurred in the ordinary course of Mortgagor's business to finance equipment and other personal property used on the Guaranty Premises the removal of Payment which would not materially damage the Improvements or materially impair the value of the Improvements, provided that such debt is not evidenced by a promissory note executed by Mortgagor and is not secured by any property other than the Cash Management Agreementitem of equipment or personal property so financed; and (iv) payment of the preferred equity permitted under Subparagraph (2) above. No Indebtedness indebtedness other than the Debt may be secured (subordinate or pari pan passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will not make any loans or advances to any third party (including any Affiliate or constituent party, any Guarantor or and any Affiliate of any constituent party Mortgagor or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesGuarantor or any Affiliate of Mortgagor or Guarantor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower Mortgagor has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, good standing and Borrower right to do business in the state where it is organized or registered and in the state where the Premises are located, and Mortgagor will not, nor and will Borrower not permit any SPC Entity its Governing Entity, to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylawsorganization, operating agreement, certificate of organization, trust or other organizational documents of Borrower Mortgagor or such SPC the Governing Entity in any manner that would affect either amend or modify the status terms of Borrower the preferred equity referred to in Paragraph 8(g) above or such SPC cause Mortgagor or the Governing Entity as a single- purpose, bankruptcy-remote entityto be violation of any other provision of this Paragraph 9, without (i) the prior written consent of LenderMortgagee, in its sole discretion andwhich consent will not be unreasonably withheld, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letterdelayed or conditioned.
(h) Borrower Mortgagor will maintain all of its books, records, financial statements and bank accounts separate from those of its Guarantor and the Affiliates of Mortgagor and any constituent party Guarantor, and Mortgagor will file its own tax returns (provided except that Borrower's financial statements and as long as Mortgagor
is a disregarded entity for United States federal income tax returns may purposes Mortgagor will be prepared on shown as a separate member of the consolidated basis with other entities provided that such consolidated financial statements and group of which Mortgagor is a part for United States federal income tax returns indicate the separate existence of Borrower and its assets and liabilitiespurposes). Borrower Mortgagor shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower Mortgagor will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity person (including Guarantor and any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Mortgagor and Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized and Mortgagor 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.
(k) Borrower shall not Neither Mortgagor, Guarantor nor the Governing Entity will seek the dissolution, winding up, liquidation, consolidation or merger merger, in whole or in part, of BorrowerMortgagor or such Governing Entity.
(l1) Borrower Mortgagor will not commingle the funds and other assets of Borrower Mortgagor with those of any Affiliate or constituent party, any Guarantor, Guarantor or any Affiliate of any constituent party Mortgagor or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
Samples: Mortgage (American Realty Capital Healthcare Trust Inc)
Single Purpose Entity/Separateness. Borrower Mortgagor represents, ---------------------------------- warrants and covenants as follows:.
(a) Borrower does Mortgagor has not own and will shall not own any asset or property other than (i) the PropertiesMortgaged Property, and (ii) incidental personal property necessary for the ownership or operation of the PropertiesMortgaged Property.
(b) Borrower will Xxxxxxxxx has not engaged and shall not engage in any business or activity other than the ownership, management and operation of the Properties Mortgaged Property and Borrower Mortgagor will conduct and operate in all material respects its business as presently conducted and operated.
(c) Borrower will Mortgagor has not and shall not enter into or be a party to any transaction, contract or agreement with any Affiliate guarantor of Borrower, any constituent party of Borrower, Guarantor the Debt or any Affiliate of part thereof (a "Guarantor") or any constituent party which is directly or Guarantorindirectly controlling, controlled by or under common control with Mortgagor or Guarantor (an "Affiliate"), except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an armsarm's-length basis with third parties other than any such partyGuarantor or Affiliate.
(d) Borrower Mortgagor has not incurred and will shall not incur any Indebtednessindebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than (i) the Debt and (ii) trade and operational debt 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, except pursuant to 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 Guaranty of Payment original loan amount evidenced by the Note, and further provided that all such trade debts are paid within sixty (60) days after the Cash Management Agreementsame are incurred. No Indebtedness indebtedness other than the Debt may be secured (senior, subordinate or pari passu) ---- ----- by the Properties, except pursuant to the Junior MortgageMortgaged Property.
(e) Borrower Mortgagor has not made and will shall not make any loans or advances to any third party (including party, nor to Guarantor, any Affiliate or constituent party, any Guarantor or any Affiliate of any constituent party or Guarantor), except pursuant to the Guaranty of Payment or as provided in the Cash Management Agreement, and shall not acquire obligations or securities of its AffiliatesMortgagor.
(f) Borrower Mortgagor is and will remain solvent and Borrower Mortgagor will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due.
(g) Borrower has done or caused to be done and will do all things necessary to observe organizational formalities and preserve its existence, and Borrower will not, nor will Borrower permit any SPC Entity to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, certificate of organization, trust or other organizational documents of Borrower or such SPC Entity in any manner that would affect the status of Borrower or such SPC Entity as a single- purpose, bankruptcy-remote entity, without (i) the prior written consent of Lender, in its sole discretion and, (ii) if a Securitization has occurred, delivery to Lender of a No Downgrade Letter.
(h) Borrower will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party and file its own tax returns (provided that Borrower's financial statements and tax returns may be prepared on a consolidated basis with other entities provided that such consolidated financial statements and tax returns indicate the separate existence of Borrower and its assets and liabilities). Borrower shall maintain its books, records, resolutions and agreements as official records.
(i) Borrower will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower, any constituent party of Borrower, any Guarantor or any Affiliate of any constituent party or Guarantor), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, shall not identify itself or any of its Affiliates as a division or part of the other and shall maintain and utilize separate stationery, invoices and checks.
(j) Borrower is adequately capitalized 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.
(k) Borrower shall not seek the dissolution, winding up, liquidation, consolidation or merger in whole or in part, of Borrower.
(l) Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(m) Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party, any Guarantor, or any Affiliate of any constituent party or Guarantor, or any other Person.
(n) Borrower does not and will not guarantee, become obligated for, pledge its assets as security for, or hold itself out to be responsible for the debts or obligations of any other Person or the decisions or actions respecting the daily business or affairs of any other Person, except pursuant to the Guaranty of Payment.
(o) If Borrower is a limited partnership or a limited liability company, the general partner or managing member (the "SPC ENTITY") shall be a corporation whose sole asset is its interest in Borrower and the SPC Entity will at all times comply, and will cause Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.40 as if such representation, warranty or covenant was made directly by such SPC Entity.
(p) Borrower shall at all times cause there to be at least one duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of the SPC Entity who shall not have been at the time of such individual's appointment, and shall not be at any time while serving as a director of the SPC Entity and has not been at any time during the preceding five (5) years (i) a shareholder of, or an officer, director (with the exception of serving as the Independent Director of the SPC Entity), attorney, counsel, partner or employee of, Borrower, the SPC Entity or any Affiliate of either of them, (ii) a customer of, or supplier to, Borrower, the SPC Entity or any Affiliate of either of them, (iii) a Person controlling or under common control with any such shareholder, partner, supplier or customer, or (iv) a member of the immediate family of any such shareholder, officer, director, partner, employee, supplier or customer. As used herein, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, (1) an individual that otherwise satisfies the foregoing shall not be disqualified from serving as an Independent Director of the SPC Entity if such individual, at or prior to the time of initial appointment, or at any time while serving as an Independent Director of the SPC Entity, (i) is an Independent Director of a "special purpose entity" affiliated with the Borrower or the SPC Entity (for purposes of this paragraph, a "special purpose entity" is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve the Borrower's and the SPC Entity's separateness that are substantially similar to those of the Borrower or the SPC Entity, as applicable, and provided, inter alia, that it (a) is organized for the limited purpose of owning and operating one or more properties or being an owner of one or more other entities that are so organized; (b) has restrictions on its ability to incur indebtedness, dissolve, liquidate, consolidate, merge and/or sell assets; (c) may not file voluntarily a bankruptcy petition on its own behalf or on behalf of an entity in which it has an ownership interest without the consent of its independent director; and (d) shall conduct itself and cause any entity in which it has an ownership interest to conduct itself in accordance with certain "separateness covenants," including, but not limited to, the maintenance of its and such entity's books, records, bank accounts and assets separate from those of any other person or entity), (ii) makes retail purchases of vehicles from dealerships that are affiliates of the SPC Entity or Borrower, or (iii) is employed by a company that provides independent director services to corporations, which company (either directly or through an affiliated entity) provides corporate registration or other services to the SPC Entity, the Borrower or any affiliate of either of them, and (2) the SPC Entity shall be entitled to pay reasonable fees to the Independent Director for his or her services as a director of the SPC Entity.
Appears in 1 contract
