Release of Unsecured Indebtedness Subsidiary Guarantors Clause Samples
The 'Release of Unsecured Indebtedness Subsidiary Guarantors' clause defines the conditions under which subsidiary guarantors are released from their obligations to guarantee unsecured debt. Typically, this clause specifies that if a subsidiary no longer guarantees the principal debt or meets certain criteria, its guarantee obligations are automatically terminated. For example, if a subsidiary is sold or otherwise ceases to be part of the consolidated group, it may be released from its guarantee. The core function of this clause is to ensure that subsidiary guarantors are not unnecessarily bound to guarantee obligations when they no longer have a relevant connection to the debt, thereby aligning the guarantees with the actual risk exposure and structure of the group.
Release of Unsecured Indebtedness Subsidiary Guarantors. The Borrower may request in writing that the Administrative Agent release, and upon receipt of such request the Administrative Agent shall promptly release, an Unsecured Indebtedness Subsidiary from the Guaranty, if: (i) such Subsidiary has ceased to be, or simultaneously with its release from the Guaranty will cease to be, a Subsidiary or an Unsecured Indebtedness Subsidiary; (ii) such Subsidiary Guarantor is not otherwise required to be a party to the Guaranty under this Section 8.14; (iii) no Default or Event of Default shall then be in existence or would occur as a result of such release, including, without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 10.1; and (iv) the Administrative Agent shall have received such written request at least ten (10) Business Days (or such shorter period as may be acceptable to the Administrative Agent) prior to the requested date of release. Delivery by the Borrower to the Administrative Agent of any such request shall constitute a representation by the Borrower that the matters set forth in the preceding sentence (both as of the date of the giving of such request and as of the date of the effectiveness of such request) are true and correct with respect to such request. The Administrative Agent agrees to furnish to the Borrower, promptly after the Borrower’s request and at the Borrower’s sole cost and expense, any release, termination, or other agreement or document as is reasonably satisfactory to the Administrative Agent and necessary or advisable to evidence the foregoing release as may be reasonably requested by the Borrower.