Subsidiary Indebtedness Clause Samples
The Subsidiary Indebtedness clause defines the rules and limitations regarding the amount and types of debt that a company's subsidiaries are permitted to incur. Typically, this clause sets specific thresholds or conditions under which subsidiaries can borrow money, issue bonds, or enter into other financial obligations, and may require lender consent for certain transactions. By establishing these boundaries, the clause helps protect the interests of lenders or investors by preventing excessive risk-taking or hidden liabilities within the corporate group.
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Subsidiary Indebtedness. With respect to the Subsidiaries, incur, create, issue, assume or permit to exist any Indebtedness or preferred stock, except:
(a) Indebtedness or preferred stock existing on the date hereof and having an aggregate principal amount (or, in the case of preferred stock, an aggregate liquidation preference) of less than $25,000,000 in the aggregate and, in the case of any such Indebtedness, any extensions, renewals or replacements thereof to the extent the principal amount of such Indebtedness is not increased, and such Indebtedness, if subordinated to the Loans, remains so subordinated on terms no less favorable to the Lenders, and the original obligors in respect of such Indebtedness remain the only obligors thereon;
(b) Indebtedness created or existing (i) hereunder or (ii) under the Three-Year Credit Agreement;
(c) intercompany Indebtedness or preferred stock to the extent owing to or held by the Borrower or another Subsidiary;
(d) Indebtedness of any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(d), when combined with the aggregate principal amount of all Capital Lease Obligations incurred pursuant to Section 6.01(e) and all Indebtedness incurred pursuant to Section 6.01(f), shall not exceed $100,000,000 at any time outstanding;
(e) Capital Lease Obligations in an aggregate principal amount, when combined with the aggregate principal amount of all Indebtedness incurred pursuant to Section 6.01(d) and Section 6.01(f), not in excess of $100,000,000 at any time outstanding;
(f) Indebtedness of any person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness 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, (ii) immediately before and after such person becomes a Subsidiary, no Event of Default or Default shall have occurred and be continuing and (iii) the aggregate principal amount of Indebtedness permitted by this clause (f), when combined with the aggregate principal amount of all Indebtedness incurred pur...
Subsidiary Indebtedness. The Borrower shall not permit its Subsidiaries to incur, assume or suffer to exist any Indebtedness, except:
(a) existing Indebtedness outstanding on the Effective Date (such Indebtedness, to the extent the principal amount thereof is $30,000,000 (or, if denominated in a currency other than U.S. Dollars, the Dollar Equivalent of $30,000,000) or more, being described on Schedule 5.15 attached hereto), and any subsequent extensions, renewals or refinancings thereof (i) so long as such Indebtedness is not increased in amount (other than amounts incurred to pay costs of such extension, renewal or refinancing), the scheduled maturity date thereof (if prior to the Maturity Date) is not accelerated, the interest rate per annum applicable thereto is not increased, any scheduled amortization of principal thereunder prior to the Maturity Date is not shortened and the payments thereunder are not increased, or (ii) such extensions, renewals or refinancings are otherwise expressly permitted by, and are effected pursuant to, another clause in this Section 6.12 (other than clause (l) hereof);
(b) Indebtedness under the Credit Documents;
(c) intercompany loans and advances to the Borrower or its Subsidiaries, and intercompany loans and advances from any of such Subsidiaries or SPVs to the Borrower or any other Subsidiaries of the Borrower;
(d) Indebtedness under any Interest Rate Protection Agreements and any Currency Rate Protection Agreements;
(e) Indebtedness (i) under unsecured lines of credit for overdrafts or for working capital purposes in foreign countries with financial institutions, and (ii) arising from the honoring by a bank or other Person of a check, draft or similar instrument inadvertently drawing against insufficient funds, all such Indebtedness not to exceed the Dollar Equivalent of $300,000,000 in the aggregate at any time outstanding, provided that amounts under overdraft lines of credit or outstanding as a result of drawings against insufficient funds shall be outstanding for one (1) Business Day before being included in such aggregate amount;
(f) Indebtedness of a Person existing at the time such Person becomes a Subsidiary of the Borrower or is merged, consolidated or amalgamated with or into the Borrower or any Subsidiary of the Borrower and not incurred in contemplation of such transaction, and extensions, renewals or refinancings thereof that do not increase the amount of such Indebtedness (other than amounts included to pay costs of such extensi...
Subsidiary Indebtedness. NAI will not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness, except:
(a) by Guarantee or assumption of any obligations evidenced or created by (x) any of the Operative Documents, (y) or other comparable agreements between BNPPLC and NAI covering other properties, or (z) the Credit Agreement referenced on the first page of the Disclosure Letter;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 to the Disclosure Letter and extensions, renewals and replacements of any such Indebtedness that do not increase the then outstanding principal amount thereof;
(c) Indebtedness of (i) any Subsidiary to any Material Domestic Subsidiary and (ii) any Subsidiary that is not a Material Domestic Subsidiary to any other Subsidiary that is not a Material Domestic Subsidiary;
(d) Guarantees by any Subsidiary of Indebtedness of NAI or any other Subsidiary;
(e) Indebtedness of any Subsidiary incurred to finance the acquisition, construction or improvements of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets (and additions, accessions, parts, improvement and attachments thereto and the proceeds thereof) prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the then outstanding principal amount thereof; provided that such Indebtedness is incurred prior to or within 120 days after such acquisition or the completion of such construction or improvement; and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;
(f) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that such Indebtedness 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, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;
(g) Indebtedness of any Subsidiary as an account party in respect of letters of credit, bank guarantees and bankers’ acceptances;
(h) Indebtedness in respect of Swap Agreements permitted under subparagraph 3(B)(4);
(i) Indebtedness of Subsidiaries which are not Material Domestic Subsidiaries in an aggregate principal amount not exceeding 5% of Consolidated Tot...
Subsidiary Indebtedness. The Borrower will not permit any of its Subsidiaries to contract, create, incur or assume any Indebtedness for borrowed money, other than:
(a) Indebtedness owing by a Subsidiary of the Borrower to the Borrower or any Subsidiary of the Borrower;
(b) purchase money Indebtedness to finance the acquisition, construction, or improvement, or capital lease of assets (including equipment); provided that such Indebtedness when incurred shall not exceed the purchase price and costs, as applicable, of acquisition, construction or improvement of the asset(s) financed and all fees, costs and expenses relating thereto;
(c) Indebtedness of a Subsidiary which exists prior to the time of acquisition of such Subsidiary (including Indebtedness at the time of the acquisition of the capital stock or assets of such Person or a merger with or consolidation with such Person by the Borrower or a Subsidiary) as long as such Indebtedness was not created in anticipation thereof;
(d) Indebtedness (i) under unsecured overdraft lines of credit or for working capital purposes in foreign countries with financial institutions and (ii) arising from the honoring by a bank or other person of a check, draft or similar instrument inadvertently drawing against insufficient funds;
(e) extensions, refinancing, renewals or replacements (or successive extensions, refinancing, renewals, or replacements), in whole or in part, of the Indebtedness permitted above which, in the case of any such extension, refinancing, renewal or replacement, does not increase the amount of the Indebtedness being extended, refinanced, renewed or replaced, other than amounts incurred to pay the costs of such extension, refinancing, renewal or replacement; and
(f) any other Indebtedness not otherwise permitted by this Section 7.2.4 in a principal amount not to exceed fifteen percent (15%) of Consolidated Net Tangible Assets in the aggregate at any one time outstanding.
Subsidiary Indebtedness. The Borrower will not permit the aggregate principal amount of Indebtedness of its Subsidiaries (excluding any Indebtedness of a Subsidiary owed to the Borrower or another Subsidiary, but including any Guarantee by a Subsidiary of Indebtedness of the Borrower) at any time to exceed $20,000,000.
Subsidiary Indebtedness. The Borrower will not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing on the date hereof;
(b) Indebtedness of any Subsidiary to the Borrower or any Wholly-Owned Subsidiary;
(c) any Indebtedness incurred to refinance any Indebtedness of any Subsidiary outstanding on the Effective Date to the extent the amount of Indebtedness so incurred is not in excess of the amount of Indebtedness refinanced plus any interest, fees and premiums incurred in connection therewith;
(d) Guarantees by any Subsidiary of Indebtedness of the Borrower or any Wholly-Owned Subsidiary to the extent such Indebtedness is permitted under this Agreement;
(e) reimbursement obligations with respect to letters of credit obtained in the ordinary course of business;
(f) Indebtedness in respect of Capital Leases; and
(g) other Indebtedness incurred after the Effective Date in an aggregate amount not to exceed $100,000,000.
Subsidiary Indebtedness. The Company will not permit any Subsidiary (other than a Subsidiary Guarantor) to create, incur or suffer to exist any Indebtedness, other than:
(a) Indebtedness existing on the date of this Agreement and described on Schedule 7.01;
(b) Indebtedness secured by Liens permitted pursuant to the terms of Section 7.02(a)(iii);
(c) Indebtedness of such Subsidiary owing to the Company or any other Subsidiary;
(d) [Reserved];
(e) Indebtedness arising from the renewal or extension of any Indebtedness described in clauses (a), (b), (f) or (o), provided that the amount of such Indebtedness is not increased and any Liens securing such Indebtedness attached only to the assets previously serving as collateral for such Indebtedness prior to such renewal or extension;
(f) Indebtedness owing by such Subsidiary that was in existence at the time such Person first became a Subsidiary, or at the time such Person was merged into or consolidated with a Subsidiary, which Indebtedness was not created or incurred in contemplation of such event, provided that such Indebtedness is at the time permitted pursuant to the terms of Section 7.02 (in the case of any Indebtedness secured by any Liens on assets of such Subsidiary);
(g) Indebtedness resulting from Surety Indemnification Obligations of such Subsidiary;
(h) Indebtedness, if any, which may be deemed to exist with respect to Swap Agreements;
(i) Indebtedness, if any, that may exist in respect of deposits or payments made by customers or clients of such Subsidiaries;
(j) Indebtedness owed in respect of any netting services, overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing−house transfers of funds or in respect of letters of credit or bankers’ acceptances supporting trade payables;
(k) to the extent constituting Indebtedness, contingent liabilities in respect of any indemnification, adjustment of purchase price, non-compete, consulting, deferred compensation and similar obligations;
(l) Indebtedness representing deferred compensation to directors, officers, employees, members of management, managers and consultants of a Subsidiary incurred in the ordinary course of business;
(m) Guarantees by Subsidiaries in respect of Indebtedness permitted to be incurred pursuant to this Section 7.01;
(n) Indebtedness incurred to finance workers’ compensation, health, disability or life insurance or which finances other employee benefits or property, casu...
Subsidiary Indebtedness. Permit (whether or not otherwise permitted under Section 7.13) any Subsidiary to create, incur, assume or suffer to exist any Indebtedness or guaranty obligation, except (a) Indebtedness and Guaranteed Indebtedness in existence on the Closing Date, (b) Indebtedness owed to Borrower or another Subsidiary of Borrower, and (c) Capital Lease Obligations and purchase money obligations of a Subsidiary in respect of Property used or leased by that Subsidiary.
Subsidiary Indebtedness. 53 Section 7.12. Reserved. ...............................................................................................53
Subsidiary Indebtedness. Permit the Indebtedness of all Subsidiaries (excluding the ESOP Guaranty) to exceed (on a combined basis) 10% of Tangible Net Worth.