Special Purpose Entity Clause Samples
A Special Purpose Entity (SPE) clause defines the creation or use of a separate legal entity established for a specific, limited objective within a transaction or project. Typically, this entity is structured to isolate financial risk, such as holding particular assets or liabilities, and may be used in securitizations, project finance, or to facilitate off-balance-sheet arrangements. The core function of this clause is to ensure that the obligations and risks associated with certain activities are legally separated from those of the parent or sponsoring organization, thereby protecting the main entity from potential losses or liabilities.
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Special Purpose Entity. At all times prior to the Collection Date, the Borrower has not and shall not:
(i) engage in any business or activity other than the purchase, receipt, management and sale of Collateral, the transfer and pledge of Collateral pursuant to the terms of the Transaction Documents, the entry into and the performance under the Transaction Documents and such other activities as are incidental thereto;
(ii) acquire or own any assets other than (a) the Collateral or (b) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents including, without limitation, capital contributions which it may receive from the Equityholder;
(iii) merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the prior written consent of the Administrative Agent, or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation, unless, in connection with any of the foregoing, such action shall result in the substantially contemporaneous occurrence of the Collection Date;
(iv) except as otherwise permitted under clause (iii), fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent, amend, modify, terminate or fail to comply with the provisions of its limited liability company agreement, or fail to observe limited liability company formalities;
(v) form, acquire or own any Subsidiary, own any Capital Stock in any other entity (other than Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan), or make any Investment in any Person (other than Permitted Investments or Capital Stock in Obligors in connection with the exercise of any remedies with respect to a Loan or any exchange offer, work-out or restructuring of a Loan) without the prior written consent of the Administrative Agent;
(vi) commingle its assets with the assets of any of its Affiliates, or of any other Person;
(vii) incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebt...
Special Purpose Entity. The Borrower is in compliance with Section 6.02(q).
Special Purpose Entity. (i) The Seller shall conduct its business solely in its own name through its duly authorized officers or agents so as not to mislead others as to the identity of the entity with which those others are concerned, and particularly will use its best efforts to avoid the appearance of conducting business on behalf of Arcadia Financial or any other Affiliate thereof or that the assets of the Seller are available to pay the creditors of Arcadia Financial or any Affiliate thereof. Without limiting the generality of the foregoing, all oral and written communications, including, without limitation, letters, invoices, purchase orders, contracts, statements and loan applications, will be made solely in the name of the Seller.
(ii) The Seller shall maintain corporate records and books of account separate from those of Arcadia Financial and the other Affiliates thereof.
(iii) The Seller shall obtain proper authorization from its board of directors of all corporate action requiring such authorization, meetings of the board of directors of the Seller shall be held not less frequently than three times per annum and copies of the minutes of each such board meeting shall be delivered to Financial Security within two weeks of such meeting.
(iv) The Seller shall obtain proper authorization from its shareholders of all corporate action requiring shareholder approval, meetings of the shareholders of the Seller shall be held not less frequently than one time per annum and copies of each such authorization and the minutes of each such shareholder meeting shall be delivered to Financial Security within two weeks of such authorization or meeting, as the case may be.
(v) Although the organizational expenses of the Seller have been paid by Arcadia Financial, operating expenses and liabilities of the Seller shall be paid from its own funds.
(vi) The annual financial statements of the Seller shall disclose the effects of the Seller's transactions in accordance with generally accepted accounting principles and shall disclose that the assets of the Seller are not available to pay creditors of Arcadia Financial or any other Affiliate thereof.
(vii) The resolutions, agreements and other instruments of the Seller underlying the transactions described in this Agreement and in the other Transaction Documents shall be continuously maintained by the Seller as official records of the Seller separately identified and held apart from the records of Arcadia Financial and each other Affiliate thereo...
Special Purpose Entity. The Seller will be a special purpose company whose primary activities are restricted in its Limited Liability Company Agreement to: (i) purchasing or otherwise acquiring from the Originators, owning, holding, collecting, granting security interests or selling interests in the Sold Assets and Seller Collateral, (ii) entering into agreements for the selling, servicing and financing of the Receivables Pool (including the Transaction Documents) and (iii) conducting such other activities as it deems necessary or appropriate to carry out its primary activities.
Special Purpose Entity. (A) The capital of the Seller is adequate for the business and undertakings of the Seller.
(B) Other than as provided in the Basic Documents, the Seller is not engaged in any business transactions with Credit Acceptance.
(C) Other than in connection with the Basic Documents, the Seller has not incurred any indebtedness or assumed or guarantied any indebtedness of any other entity.
(D) At least two directors of the board of directors of the Seller shall be persons who (1) are not, and will not be, a director, officer, employee or holder of any equity securities of Credit Acceptance or any of its Affiliates or Subsidiaries; provided that each such person may be an independent director or manager of another special purpose entity affiliated with the Servicer, and (2) have (x) prior experience as an “independent director” for a corporation or limited liability company whose charter documents required the unanimous consent of all independent directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (y) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.
(E) Once identified as Seller funds and assets by the Servicer and separated in accordance with the Servicer’s normal and customary business practices, the funds and assets of the Seller are not, and will not be, commingled with the funds of any other Person, except for Dealer Collections and erroneous deposits.
(F) The limited liability company agreement of the Seller requires it to maintain (A) correct and complete minute books and records of account, and (B) minutes of the meetings and other proceedings of its shareholders and board of directors.
Special Purpose Entity. The Borrower will (a) own no material assets, and not engage in any material business, other than the assets and transactions specifically contemplated by the Loan Documents, (b) not incur any indebtedness for borrowed money or material obligation, secured or unsecured, direct or indirect, absolute or contingent, other than as contemplated hereby (including the Loan Documents and/or the Operating Agreement) or as approved by a Super-Majority in Interest of the members of the Borrower), (c) not make any loans or advances to any third party (other than Assets), and shall not acquire obligations or securities of any Affiliated Party, (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets, (e) do all things necessary under applicable law and its organizational documents to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its Organizational Documents, or suffer the same to be amended, modified or otherwise changed (except to the extent that the same would not result in a Change of Control and would not otherwise violate the terms of this Agreement), without the prior written consent of the Lender, (f) maintain all of its books, records, financial statements and bank accounts separate from those of any Affiliated Parties, (g) 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 Affiliated Party), correct any known misunderstanding regarding its status as a separate entity, conduct business in its own name, not identify itself or any Affiliated Party as a division or part of the other and maintain and utilize separate stationary, invoices and checks, (h) 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, (i) not engage in or suffer any dissolution, winding-up, liquidation, consolidation or merger in whole or in part, (j) not commingle its funds or other assets with those of any Affiliated Party or any other Person, (k) 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 Affiliated Party or any other Person, (l) not and will not hold itself out to be responsible for the debts or obligations of any other Person and (m) be formed and orga...
Special Purpose Entity. The Borrower will be a special purpose company whose primary activities are restricted in its Limited Liability Company Agreement to: (i) purchasing or otherwise acquiring from the Originators, owning, holding, collecting, granting security interests or selling interests in the Collateral, (ii) entering into agreements for the selling, servicing and financing of the Receivables Pool (including the Transaction Documents) and (iii) conducting such other activities as it deems necessary or appropriate to carry out its primary activities.
Special Purpose Entity. The Borrower shall be in compliance with the special purpose entity requirements set forth in Section 4.1(u).
Special Purpose Entity. The Company is intended to qualify as a “special purpose” entity and agrees that it will, unless agreed otherwise by a Supermajority of the Members:
(a) not own any asset or property other than (i) the Property, (ii) the Licenses and (iii) incidental personal property necessary to carry out the business of the Company;
(b) not engage in any activities other than the activities identified in Section 1.6 above;
(c) not incur, create or assume any indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation) other than unsecured trade payables;
(d) not make any loans or advances to any Person (including any Member), and not acquire obligations or securities of any Person;
(e) remain solvent and pay its debts and liabilities (including, as applicable, those for shared personnel and overhead expenses) only out of its own funds (to the extent available and not from the funds of any other Person (including any Member) under any circumstance) as the same shall become due;
(f) observe Delaware limited liability company laws and organizational formalities in all material respects in order to preserve its separate existence;
(g) maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including any Member);
(h) prepare separate financial statements and not have its assets listed on the financial statement of any other Person (including any Member), provided, however, that if required by GAAP, the Company’s assets may be included in a consolidated financial statement of its Members;
(i) file its own tax returns, if any, as may be required under applicable law and pay any taxes so required to be paid under applicable law; Table of Contents
(j) maintain its books, records, resolutions and agreements as official records;
(k) at all times hold itself out to the public as a legal entity separate and distinct from any other Person or entity (including any Member);
(l) conduct business in its own name and correct any known misunderstanding regarding its status as a separate entity;
(m) not identify itself or its Affiliates as a division or part of the other or of any Member;
(n) maintain and utilize separate stationery, invoices and checks bearing its own name;
(o) be and remain adequately capitalized for the normal obligations reasonably foreseeable in an operation of its size and character and in light of its contemplated activities;
(p) to the fullest extent...
Special Purpose Entity. The Borrower has not and shall not: