Common use of Covered Transactions Clause in Contracts

Covered Transactions. The Borrower shall not use the proceeds of any Advance in a manner that would cause such credit extension to become a “covered transaction” as defined in Section 23A of the Federal Reserve Act (12 U.S.C. § 371c) and the Federal Reserve Board’s Regulation W (12 C.F.R. Part 223), including any transaction where the proceeds of any Advance are (x) used for the benefit of, or transferred to, an “affiliate” of a Lender (as such term is defined in 12 C.F.R. Part 223), or (y) used to invest in any fund advised by a Lender or an “affiliate” thereof (as such term is defined in 12 C.F.R. Part 223).