Common use of SPE Covenants Clause in Contracts

SPE Covenants. Borrower hereby covenants that as of the date hereof and until such time as the Debt shall be paid in full: (a) ESLA will not own any asset or property other than (i) the Property and (ii) incidental Personal Property necessary for the ownership or operation of the Property. (b) ESBA, Operating Company and Observatory Tenant will not own any asset or property other than (i) their respective leasehold interests in the Property, (ii) with respect ESBA, its 100% ownership interest in ESLA, (iii) with respect to Operating Company, its 99% ownership interest in Observatory Tenant and 100% ownership interest in ESB 102 Corporation, (iv) their respective interests in ESB Captive Insurance Company L.L.C. (“ESB Captive”), (v) Operating Company’s interest in the Intellectual Property, and (vi) incidental Personal Property necessary for the ownership and operation of such leasehold interest; (c) ESLA will not engage in any business other than the ownership, management and operation of the Property and ESLA will conduct and operate its business as presently conducted and operated; (d) ESBA and Operating Company will not engage in any business other than its respective leasehold ownership of the Property, except, in the case of Operating Company, to license its Intellectual Property from time to time, and will conduct and operate its business substantially as presently conducted and operated. Observatory Tenant will not engage in any business other than in connection with its leasehold ownership of the Property and will conduct and operate its business substantially as presently conducted and operated; (e) Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents and properly reflected on its books and records and supervisory fees, Borrower, Operating Company and Observatory Tenant will not enter into any contract or agreement with any Affiliate of Borrower, Operating Company or Observatory Tenant, any constituent party of Borrower, Operating Company or Observatory Tenant or any Affiliate of any constituent party except with respect to ESB Captive, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with third parties other than any such party. (f) Except for (i) intercompany loans properly reflected on their respective financial statements, including, with respect to ESBA, a loan to ESBC in the amount of $8,900,000 and, with respect to ESB Captive, a loan to Operating Company in the amount of $4,250,000, and (ii) de minimis loans to employees, the Credit Parties will not make any loans to any third party (including any Affiliate or constituent party), and shall not acquire obligations or securities of its Affiliates. Any intercompany loan made to ESLA and/or ESBA shall be expressly subordinate to the Loan and any such junior lender shall enter into a subordination agreement with Agent, for the benefit of the Lenders, substantially in the form of Exhibit J attached hereto. (g) Borrower, Operating Company and Observatory Tenant will remain Solvent and will pay their respective debts and liabilities (including, as applicable, shared personnel and overhead expenses) from their respective assets in the ordinary course subject to good faith disputes. (h) Except as permitted pursuant to Section 8.3, Borrower, Operating Company and Observatory Tenant will do all things necessary to observe organizational formalities and preserve their respective separate existence, and Borrower, Operating Company and Observatory Tenant will not, nor will Borrower, Operating Company and Observatory Tenant permit any constituent party to, amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower, Operating Company or Observatory Tenant without the prior consent of Agent in any manner that (i) violates the covenants set forth in this Section 4.2.19 or (ii) with respect to Borrower, amends, modifies or otherwise changes any provision thereof that by its terms cannot be modified at any time when the Loan is outstanding or by its terms cannot be modified without Agent’s consent. (i) Borrower, Operating Company and Observatory Tenant will each maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party. Borrower’s, Operating Company’s and Observatory Tenant’s assets will not be listed as assets on the financial statement of any other Person, provided, however, that Borrower’s, Operating Company’s and Observatory Tenant’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower, Operating Company or Observatory Tenant, as applicable, and such Affiliates and to indicate that Borrower’s, Operating Company’s or Observatory Tenant’s, assets and credit, as applicable, are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s, Operating Company’s or Observatory Tenant’s own separate balance sheet, as applicable. Borrower, Operating Company and Observatory Tenant shall each maintain its books, records, resolutions and agreements as official records. (j) Each Credit 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 (including any Affiliate thereof or any constituent party thereof), 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 and separate stationery, invoices and checks bearing its own name. (k) Each Credit Party will each 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. (l) Except as permitted pursuant to Section 8.3, neither Borrower, Operating Company or Observatory Tenant nor any constituent party thereof will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower, Operating Company or Observatory Tenant, as applicable, or transfer or otherwise dispose of all or substantially all of its assets. (m) Except with respect to the Cash Management Agreement, each of Borrower, Operating Company and Observatory Tenant will not commingle the funds and other assets of Borrower, Operating Company and Observatory Tenants with those of any Affiliate or constituent party or any other Person, and will hold all of its assets in its own name, respectively. (n) Each Credit Party has and, subject to Section 8.3, will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person. (o) No Credit Party will guarantee or become obligated for the debts of any other Person and does not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person. (p) Other than its agent or supervisor, no Credit Party will permit any Affiliate or constituent party independent access to its bank accounts. (q) Each Credit Party will pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations or fairly allocate costs of any shared employees, as applicable. (r) Each Credit Party will compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred. (s) Subject to Section 8.3, each Credit Party will file its own tax returns separate from those of any other Person, except to the extent that Borrower or any other Credit Party is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and pay any taxes required to be paid under applicable law. (t) Each Credit Party will allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including for shared office space and for services performed by an employee of an Affiliate. (u) No Credit Party will pledge its assets to secure the obligations of any other Person. (v) No Credit Party will buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities). (w) No Credit Party will form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity, except as described in Schedule X. (x) The Credit Parties will consider the interests of their respective creditors in connection with all limited liability company or limited partnership actions. (y) Except as provided in the Guaranty and the Environmental Indemnity, no Credit Party has or will have any of its obligations guaranteed by any Affiliate.