Limitation on Subsidiary Debt Clause Samples
The Limitation on Subsidiary Debt clause restricts the amount or types of debt that a company's subsidiaries are permitted to incur. Typically, this clause sets specific thresholds or conditions under which subsidiaries can take on new loans, issue bonds, or enter into other financial obligations, sometimes allowing exceptions for certain types of routine or secured debt. Its core practical function is to protect the interests of lenders or investors by preventing excessive leverage at the subsidiary level, thereby reducing the risk that the overall financial stability of the corporate group is undermined by uncontrolled subsidiary borrowing.
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Limitation on Subsidiary Debt. (a) The Company shall not cause or permit any Subsidiary that is not a Subsidiary Guarantor (i) to guarantee the obligations of, or become a co-borrower with, the Company or any Subsidiary Guarantor, under any Credit Facility of the Company or any Subsidiary or (ii) to create, assume, Incur, issue or guarantee any Material Indebtedness of the Company or another Subsidiary Guarantor, unless, in the case of clause (i) or (ii), within 30 days thereof, the Company causes such Subsidiary to become a Subsidiary Guarantor by executing and delivering a Guarantee Agreement.
(b) Clause (ii) of Section 4.7(a) shall not apply to the following items of Indebtedness:
(i) Indebtedness of a Person existing at the time such Person is merged with or into, amalgamated with, or is consolidated into, a Subsidiary, or which is assumed by a Subsidiary in connection with an acquisition of substantially all the assets of such Person, so long as such Indebtedness was not created in anticipation of such merger, amalgamation, consolidation or acquisition, and refinancing or replacement Indebtedness in respect thereof, so long as (A) the principal amount thereof does not exceed the principal amount of the Indebtedness being refinanced or replaced plus accrued and unpaid interest thereon together with any reasonable fees, premiums (including tender premiums) and expenses relating to such refinancing or replacement and (B) such refinancing or replacement Indebtedness is Incurred by the same Person(s) as the Indebtedness being refinanced or replaced;
(ii) Indebtedness of a Person existing at the time such Person becomes a Subsidiary, so long as such Indebtedness was not Incurred in anticipation of such Person becoming a Subsidiary, and refinancing or replacement Indebtedness in respect thereof, so long as (A) the principal amount thereof does not exceed the principal amount of the Indebtedness being refinanced or replaced plus accrued and unpaid interest thereon together with any reasonable fees, premiums (including tender premiums) and expenses relating to such refinancing or replacement and (B) such refinancing or replacement Indebtedness is Incurred by the same Person(s) as the Indebtedness being refinanced or replaced;
(iii) purchase money obligations and refinancing or replacement Indebtedness in respect thereof, so long as (A) the principal amount thereof does not exceed the principal amount of the Indebtedness being refinanced or replaced plus accrued and unpaid interest thereon t...
Limitation on Subsidiary Debt. (a) STBV will not permit any of its Subsidiaries (other than the Issuer) to create, assume, incur, Guarantee or otherwise become liable for or suffer to exist any Indebtedness (any Indebtedness of a Subsidiary of STBV that is not a Guarantor (other than the Issuer), “Subsidiary Debt”), without Guaranteeing the payment of the principal of, premium, if any, and interest on the Notes on an unsecured unsubordinated basis.
(b) Section 4.09(a) shall not apply to, and there shall be excluded from Indebtedness in any computation under such restriction, Subsidiary Debt constituting:
(1) Indebtedness of a Person existing at the time such Person is merged into or consolidated with or otherwise acquired by any Subsidiary of STBV or at the time of a sale, lease or other disposition of the properties and assets of such Person (or a division thereof) as an entirety or substantially as an entirety to any Subsidiary of STBV and is assumed by such Subsidiary; provided that any such Indebtedness was not incurred in contemplation thereof and is not Guaranteed by any other Subsidiary of STBV (other than any Guarantee existing at the time of such merger, consolidation or sale, lease or other disposition of properties and assets and that was not issued in contemplation thereof);
Limitation on Subsidiary Debt. The aggregate outstanding principal amount of Debt of the Subsidiaries of the Borrower (exclusive of (i) Debt owing to the Borrower or another Subsidiary and (ii) Foreign Debt) shall at no time exceed 15% of Consolidated Net Assets.
Limitation on Subsidiary Debt. The Parent shall not permit the outstanding principal amount of Debt of its Subsidiaries (other than (i) Debt owed to any Borrower or Guarantor and (ii) Debt owed under this Agreement or any Loan Document) at any time to exceed, in the aggregate, an amount equal to or greater than 10% of Consolidated Total Assets.
Limitation on Subsidiary Debt. The Borrower will not permit any Subsidiary or any CSX Conrail Subsidiary to create, incur or assume any Debt (other than Debt substantially secured by a Lien or Liens on assets of such Subsidiary or such CSX Conrail Subsidiary permitted under Section 6.02) after the Closing Date, except:
(a) extensions, renewals and replacements of any Debt existing on the date hereof that do not increase the outstanding principal amount thereof (other than to finance payments made in connection therewith);
(b) Debt of any Subsidiary or CSX Conrail Subsidiary to the Borrower or any other Subsidiary or CSX Conrail Subsidiary;
(c) Debt of any Person that becomes a Subsidiary after the date hereof; provided that such Debt exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary;
(d) Debt of any Subsidiary or CSX Conrail Subsidiary as an account party in respect of letters of credit; and
(e) other Debt; provided that (i) at the time of the creation, incurrence or assumption of such Debt and after giving effect thereto, the aggregate principal amount of all such Debt of the Subsidiaries does not exceed an amount equal to 10% of Total Capitalization at such time and (ii) any Allocable CSX/NS Debt of the CSX/NS Acquisition Sub Entities incurred after the Closing Date shall, without duplication, be treated as “Debt” of a Subsidiary for purposes of clause (i) of this proviso.
Limitation on Subsidiary Debt. The Company shall not permit the outstanding principal amount of Debt of the Subsidiaries (other than (i) Debt owed to any Borrower or Subsidiary Guarantor and (ii) Debt owed under this Agreement or any other Loan Document) at any time to exceed, in the aggregate, 10% of Consolidated Total Assets, provided that Debt outstanding under Lilly's 7-3/4% Senior Notes due 2007 shall not be included in the determination of the Subsidiaries' "Debt" under this Section.
Limitation on Subsidiary Debt. Permit its Significant Subsidiaries (as defined in the Indenture) to incur any Funded Debt (as defined in the Indenture) other than as permitted in the Indenture.
Limitation on Subsidiary Debt. The Company shall not permit the outstanding principal amount of Debt of the Subsidiaries (other than (i) Debt owed to any Borrower or Subsidiary Guarantor, (ii) $250,000,000 in Securitization Debt and (ii) Debt owed under this Agreement or any other Loan Document) at any time to exceed, in the aggregate, 10% of Consolidated Total Assets.
Limitation on Subsidiary Debt. So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification obligations), the Borrower shall not permit its Subsidiaries to directly or indirectly create, incur, assume or suffer to exist any Debt, except:
(a) Debt owed by any Subsidiary to the Borrower or any other Subsidiary; (b) Debt of Foreign Subsidiaries in an aggregate principal amount not to exceed $350,000,000 at any time outstanding to the extent such Foreign Subsidiaries are subject to capital requirements imposed by local laws and regulations that prohibit the repatriation of funds by such Foreign Subsidiaries to the Borrower or any Domestic Subsidiary or the repatriation of funds by such Foreign Subsidiaries to the Borrower or any Domestic Subsidiary would result in material adverse tax consequences to the Borrower or its Subsidiaries; (c) Debt in an aggregate amount not to exceed $600,000,000 at any time outstanding pursuant to the European commercial paper program existing on the Restatement Date of the Treasury Subsidiary (and any refinancings thereof by a commercial paper program) to the extent such Debt is guaranteed by the Borrower; and (d) other Debt in an aggregate principal amount not to exceed $600,000,000 at any time outstanding.
Limitation on Subsidiary Debt. Except for any Indebtedness to the Borrower or any Wholly-Owned Consolidated Subsidiary of the Borrower, and except for Acquired Indebtedness, the Borrower will not permit any of its Subsidiaries to incur or at any time be liable with respect to any Indebtedness in an aggregate amount at any one time outstanding in excess of $20,000,000.