Keepwell (Commodity Exchange Act) Clause Samples
A Keepwell clause under the Commodity Exchange Act is a contractual provision in which a parent company commits to maintaining the financial health or solvency of its subsidiary, particularly in the context of regulated commodity trading activities. This clause typically requires the parent to provide financial support, such as capital infusions or guarantees, to ensure the subsidiary meets its obligations under the Act. The core function of a Keepwell clause is to reassure counterparties and regulators that the subsidiary will remain compliant and financially stable, thereby reducing credit risk and promoting market integrity.
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Keepwell (Commodity Exchange Act). Each Loan Party that is a Qualified ECP Guarantor shall, and shall cause each of its Subsidiaries which is a Qualified ECP Guarantor to, undertake to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under any Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 7.20 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 7.20 voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 7.20 shall remain in full force and effect until this Agreement is terminated. Each Qualified ECP Guarantor intends that this Section 7.20 shall constitute, and this Section 7.20 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Keepwell (Commodity Exchange Act). 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 Guarantor to honor all of its obligations under the Guaranty Agreement in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under the Guaranty Agreement for the maximum amount of such liability that can be hereby incurred without rendering its obligations under the Guaranty Agreement, as it relates to such other Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under the Guaranty Agreement shall remain in full force and effect until discharged in accordance with this Agreement. Each Qualified ECP Guarantor intends that this Section 8.13 constitute, and this Section 8.13 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.