SPE Entity Criteria Sample Clauses
The SPE Entity Criteria clause defines the specific requirements and characteristics that a Special Purpose Entity (SPE) must meet to be recognized under the agreement. Typically, this includes stipulations regarding the entity’s legal structure, independence from the parent company, and limitations on its activities, such as restrictions on incurring additional debt or engaging in business outside the defined transaction. By clearly outlining these criteria, the clause ensures that the SPE maintains its intended legal and financial separation, thereby mitigating risks related to consolidation, bankruptcy, or regulatory compliance.
SPE Entity Criteria. With respect to any SPE Entity, a “Single Purpose Entity” means a corporation or a Delaware single member limited liability company which, at all times since its formation and thereafter complies in its own right with each of the requirements contained in §7.21(b)(i)(A)-(X) except that:
(A) with respect to §7.21(b)(i)(A) the SPE Entity shall not engage in any business or activity other than being the sole managing member or general partner, as the case may be, of Borrower and owning its Equity Interest in Borrower;
(B) with respect to §7.21(b)(i)(B), the SPE Entity has not and shall not acquire or own any assets other than its Equity Interest in Borrower; and
(C) with respect to §7.21(b)(i)(M) the SPE Entity has not and shall not incur any debt, secured or unsecured, direct or contingent (including, without limitation, guaranteeing any obligation) other than the Obligations and Hedge Obligations;