Restrictions on Indebtedness Clause Samples
The "Restrictions on Indebtedness" clause limits a party’s ability to incur new debt or financial obligations during the term of an agreement. Typically, this clause outlines specific thresholds or conditions under which additional borrowing is permitted, such as requiring lender consent for loans above a certain amount or prohibiting certain types of debt altogether. Its core function is to protect the interests of the other party—often a lender or investor—by preventing excessive leverage that could jeopardize the borrower’s financial stability or the value of collateral.
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Restrictions on Indebtedness. The Credit Parties will not create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:
(i) Indebtedness to the Lenders arising under any of the Loan Documents and Hedge Obligations to a Lender Hedge Provider;
(ii) Unsecured Indebtedness provided that the Credit Parties remain in compliance with the covenants set forth in §9 after incurring such Indebtedness;
(iii) current liabilities of the Credit Parties incurred in the ordinary course of business, including but not limited to short term unsecured financing arrangements not to exceed $500,000 in the aggregate at any time, but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services;
(iv) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of §7.8;
(v) Indebtedness in respect of judgments only to the extent, for the period and for an amount not resulting in an Event of Default;
(vi) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business;
(vii) Indebtedness incurred to any other landowners, government or quasi-government or entity or similar entity in the ordinary course of business in connection with the construction or development of any Real Estate, including, without limitation, subdivision improvement agreements, development agreements, reimbursement agreements, infrastructure development agreements, agreements to construct or pay for on-site or off-site improvements and similar agreements incurred in the ordinary course of business in connection with the development of Real Estate or construction of infrastructure in connection therewith; and
(viii) Other Indebtedness of the REIT Guarantor and the Borrower (but not any other Credit Party), including in connection with customary recourse carve-outs and environmental indemnifications related to Indebtedness incurred by Subsidiaries (other than any Subsidiary Guarantor) of the REIT Guarantor, provided the REIT Guarantor and the Borrower remain in compliance with the covenants set forth in §§9.1 through 9.5 after incurring such Indebtedness. The fo...
Restrictions on Indebtedness. The Borrower and its Subsidiaries will not create, incur, assume, guaranty or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Lenders arising under any of the Loan Documents;
(b) current liabilities of the Borrower incurred in the ordinary course of business but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of Section 8.9 and Section 9.5;
(d) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Borrower shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review;
(e) Indebtedness incurred in connection with the acquisition after the date hereof of any real or personal property by the Borrower, provided that the aggregate principal amount of such Indebtedness of the Borrower outstanding at any one time shall not cause the Indebtedness to value ratio set forth in Section 11.1 to be exceeded; provided further that if such Indebtedness exceeds the aggregate amount of $20,000,000.00, the Borrower shall promptly notify the Agent; and
(f) Indebtedness existing on the date of this Agreement and listed and described on Schedule 10.3 hereto, including any refinancing of any debt listed on Schedule 10.3 hereto, so long as such refinancing is not for an amount in excess of 100% of the fair market value of the asset being refinanced.
Restrictions on Indebtedness. The Borrower shall not directly or indirectly create, incur, assume, permit, suffer to exist or otherwise be or become liable with respect to any Indebtedness except for the Permitted Indebtedness.
Restrictions on Indebtedness. 58 9.2. Restrictions on Liens. ..............................................................59 9.3.
Restrictions on Indebtedness. The Borrowers and the Guarantors may, and may permit their respective Subsidiaries to, create, incur, assume, guarantee or be or remain liable for, contingently or otherwise, any Indebtedness other than:
(a) Indebtedness (excluding the Obligations) which is incurred under a revolving credit facility or line of credit with another financial institution;
(b) Indebtedness which would result in a Default or Event of Default under §10 hereof or under any other provision of this Credit Agreement;
(c) An aggregate amount in excess of $1,000,000 at any one time in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies for which payment therefor is required to be made in accordance with the provisions of §8.9 and has not been timely made;
(d) An aggregate amount in excess of $1,000,000 at any one time in respect of uninsured judgments or awards, with respect to which the applicable periods for taking appeals have expired, or with respect to which final and unappealable judgments or awards have been rendered; and
(e) Current unsecured liabilities incurred in the ordinary course of business, which (i) are overdue for more than sixty (60) days, (ii) exceed $1,000,000 in the aggregate at any one time, and (iii) are not being contested in good faith. The terms and provisions of this §9.1 are in addition to, and not in limitation of, the covenants set f▇▇▇▇ ▇▇ §▇▇ of this Credit Agreement. Notwithstanding anything contained herein to the contrary, the Borrowers and the Guarantors will not, and will not permit any Subsidiary to, incur any Indebtedness for borrowed money which, together with other Indebtedness for borrowed money incurred by any Borrower, any Guarantor, and any Subsidiary since the date of the most recent compliance certificate delivered to the Administrative Agent in accordance with this Credit Agreement, exceeds $5,000,000 in the aggregate unless the Borrowers shall have delivered a compliance certificate in the form of Exhibit D-4 hereto to the Administrative Agent evidencing covenant compliance at the time of delivery of the certificate and on a pro-forma basis after giving effect to such proposed Indebtedness. The Administrative Agent will use good faith efforts to cause any compliance certificate delivered under this Credit Agreement to be delivered to each Lender in accordance with §15.12 and in any event on the same day or the Business Day following the day such compliance certificate is received b...
Restrictions on Indebtedness. The Borrower will not, nor will it permit any of its Material Subsidiaries to, issue, incur, assume, create, become liable for, contingently or otherwise, or have outstanding any Indebtedness, provided that the foregoing provisions shall not restrict nor operate to prevent the following Indebtedness:
(a) the Obligations;
(b) any other Indebtedness so long as after giving effect to the incurrence thereof the Borrower shall be in compliance with the Leverage Ratio set forth in Section 7.15.
Restrictions on Indebtedness. The Borrower will not, and will not permit any Guarantor or their respective Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:
Restrictions on Indebtedness. The Borrower shall not directly or indirectly create, incur, issue, assume, permit, suffer to exist or otherwise be or become liable with respect to, contingently or otherwise (collectively, “incur”), any Indebtedness; provided, however, that the Borrower may incur any of the following items of Indebtedness:
(a) Indebtedness existing under the Initial Senior Bond Indentures in an amount not to exceed the amount of Indebtedness outstanding under the Initial Senior Bond Indentures as of the date of the Fifth Omnibus Amendment;
(b) Permitted Refinancing Indebtedness of the Borrower in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted to be incurred under clause (a), (b) or (c) of this Section 2.5, provided that each of the following conditions shall have been satisfied:
(1) the Senior Facility Agent shall have received a certificate from an Authorized Officer of the Borrower to the effect that the outstanding Senior Debt (other than Working Capital Debt and Indebtedness incurred pursuant to clauses (f), (g), (h), (i), (j), (k), (l), (m), and (o) of this Section 2.5) (after giving effect to the incurrence and application of proceeds of such Permitted Refinancing
(2) using an interest rate equal to the weighted average interest rate of all such Senior Debt outstanding after giving effect to the incurrence of the Permitted Refinancing Indebtedness and the application of the proceeds therefrom);
Restrictions on Indebtedness. Create, incur, suffer or permit to exist, or assume or guarantee, either directly or indirectly, or otherwise become or remain liable with respect to, any Indebtedness, except the following:
(a) Indebtedness on account of Consolidated Current Liabilities (other than for money borrowed) incurred in the normal and ordinary course of business.
(b) Indebtedness in respect of (i) taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment thereof shall not at the time be required to be made in accordance with the provisions of Section 8.2 hereof, (ii) judgments or awards which have been in force for less than the applicable appeal period so long as execution is not levied thereunder or in respect of which the Company or any Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review in a manner reasonably satisfactory to the Bank and in respect of which a stay of execution shall have been obtained pending such appeal or review and for which adequate reserves have been established in accordance with Generally Accepted Accounting Principles, and (iii) endorsements made in connection with the deposit of items for credit or collection in the ordinary course of business.
(c) Indebtedness in an amount not to exceed in the aggregate $100,000 in respect of purchase money security interests permitted under Section 9.2(b) hereof.
(d) Indebtedness to the Bank.
(e) Indebtedness under Interest Rate Protection Agreements upon terms satisfactory to the Bank.
(f) Indebtedness reflected in the SC Licensing Note.
Restrictions on Indebtedness. (a) None of the Rig Owners shall incur, create or permit to subsist any Financial Indebtedness other than as incurred under the Finance Documents.
(b) The restrictions in paragraph (a) above do not apply to;