SPE Covenant Clause Samples
The SPE Covenant clause establishes specific obligations or restrictions for a Special Purpose Entity (SPE) within a contract. Typically, this clause outlines requirements such as maintaining the SPE's separate legal existence, limiting its activities to those necessary for the transaction, and prohibiting commingling of assets or incurring additional debt. By setting these boundaries, the clause ensures the SPE remains bankruptcy-remote and distinct from its parent or affiliates, thereby protecting the interests of lenders or investors and reducing the risk of financial contagion.
SPE Covenant. The Seller shall not take any action that would cause a violation of Section 7.4 of the Indenture by the Purchaser.
SPE Covenant. The Seller shall comply with the covenants listed on Annex D of the Credit Agreement.
SPE Covenant. The Borrower shall cause any SPE not to conduct, transact or otherwise engage in any business or operations other than (i) the ownership of the common stock of the Utility, and executing and delivering, and performing such SPE’s obligations under all documents, agreements, certificates and instruments, and performing all other acts, that in each case are necessary and appropriate in connection with the ownership of the common stock of the Utility, (ii) the maintenance of its legal existence, (iii) participating in tax, accounting, cash management and other administrative matters as a member of the consolidated group of the Borrower, (iv) incurring fees, costs and expenses relating to overhead including professional fees for legal, tax and accounting issues and paying taxes, (v) providing indemnification to officers and directors, (vi) activities incidental to the consummation of the AltaGas-WGL Merger, including executing and delivering, and performing such SPE’s obligations under all documents, agreements, certificates and instruments executed in connection with the AltaGas-WGL Merger, (vii) from time to time, (A) receiving capital contributions from the Borrower, (B) making capital contributions to the Utility, (C) receiving dividends and other distributions from the Utility, and (D) making distributions to the Borrower, and (viii) engaging in any lawful act or activity and exercising any powers permitted to limited liability companies organized under the laws of the State of Delaware that are related or incidental to and necessary, convenient or advisable for the accomplishment of the above mentioned purposes.”