Keep Well Clause Samples
A "keep well" clause is a contractual provision in which a parent company agrees to ensure the financial stability and solvency of its subsidiary. In practice, this may involve the parent company providing financial support, such as loans or capital injections, or taking other actions to prevent the subsidiary from defaulting on its obligations. The core function of a keep well clause is to reassure creditors and stakeholders that the subsidiary will remain financially healthy, thereby reducing the risk of default and enhancing the subsidiary's creditworthiness.
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Keep Well. Westaim hereby covenants with S&N as follows:
(a) Westaim shall not take any action if such action would result in Nucryst breaching its covenant set forth in section 8.13 of the Purchase Agreement (the “Net Worth Covenant”). In the foregoing sentence, “action” includes, without limitation, the act of voting securities of Nucryst in support of resolutions to declare dividends, return capital, transfer property or assume liabilities.
(b) In the event that:
(i) Nucryst is in breach of the Net Worth Covenant;
(ii) S&N has provided to Nucryst, within the Net Worth Period, written notice of an Indemnity Claim in accordance with section 9.3 of the Purchase Agreement;
(iii) it has been finally determined in accordance with sections 9.4, 9.5 or 11.2 of the Purchase Agreement that S&N is entitled to payment of such Indemnity Claim; and
(iv) Nucryst fails to satisfy such Indemnity Claim within thirty days after such final determination, Westaim shall satisfy such Indemnity Claim; provided that the aggregate liability of Westaim under this Keep Well Agreement shall not exceed $4,000,000 less the amount of any Indemnity Claims paid by Nucryst.
Keep Well. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Credit Party to honor all of its obligations under the Guaranty and Security Agreement in respect of Swap Obligations under any Secured Rate Contract; provided, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section, or otherwise under the Guaranty and Security Agreement, voidable under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount. The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the guaranties in respect of Swap Obligations under each Secured Rate Contract have been discharged, or otherwise released or terminated in accordance with the terms of this Agreement. Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Keep Well. The Parent will from time to time promptly make such capital contributions to the Borrower as may be required for the Borrower to meet its obligations to pay any and all interest and other amounts due (other than principal) under the terms of the Notes and the other Loan Documents, whenever such amounts may be due and payable, and further to provide for payment of administrative overhead and similar expenses of operating the Borrower from time to time, in each case so long as the Notes remain outstanding (such obligation to make contributions, the "Keep Well Obligation"); provided that for purposes of this Agreement, the Keep Well Obligation shall terminate with respect to Interest Obligations which no longer accrue upon the occurrence of a Cut-Off Event. The term "Interest Obligations" means the obligations of the Borrower to pay interest under the Notes; provided that (x) if the principal amount of the Notes is repaid by transfer of Purchaser Shares as provided under the terms of the Note Purchase Agreement, or (y) if the Company has completely foreclosed upon the Pledged Collateral under the Pledge Agreement or (z) an Event of Default has occurred, the Company has a right to foreclose on the Pledged Collateral, there is no stay in effect preventing such foreclosure, and the Company fails to take reasonable steps to effectuate a foreclosure with respect to all of the Pledged Collateral (any such event in clauses (x), (y) or (z), a "Cut-Off Event"), then, in each case, for purposes of this Agreement, from and after a Cut-Off Event, Interest Obligations shall no longer accrue with respect to the principal amount of the Notes (but interest may continue to accrue with respect to unpaid interest).
Keep Well. Each of Norden, Koolen and Van Ree procure that during the survival periods as set forth in Article 6.4 the Seller will remain in existence and in good standing.
Keep Well. TCI Partner shall cause its Affiliates to execute a keep well agreement, in a form acceptable to TCI Partner in its sole discretion.