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. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt); provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt), and any Restricted Subsidiary of the Company (other than a Bankrupt Subsidiary) may incur Acquired Debt not incurred by the acquired Person in contemplation of the related acquisition of such Person by such Restricted Subsidiary, if the Company's Consolidated Coverage Ratio at the time of incurrence of such Indebtedness, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom, as if the same had occurred at the beginning of the most recently ended four fiscal quarter period of the Company (commencing on or after the Issue Date) for which internal financial statements are available, would have been no less than 2.00 to 1.00.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under the Credit Agreements in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $280.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied to repay Indebtedness under the Credit Agreements in order to comply with Section 4.10(b);
(2) the incurrence by the Company of Indebtedness consisting solely of its obligations under Insurance Premium Financing Arrangements, which obligations shall not exceed at any time $30.0 million in the aggregate;
(3) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, including without limitation the Unsecured Notes;
(4) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations incurred for the purpose of financing al...
Restrictions on Indebtedness. None of the Credit Parties nor any of its Subsidiaries will incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness secured by purchase money security interests and Capitalized Leases permitted by Section 7.03(a)(viii) and any Permitted Refinancing thereof; provided, that the aggregate amount of such Indebtedness described in this subclause (a) shall not exceed $8,000,000 plus any additional amounts permitted to be incurred pursuant to the definition of Permitted Refinancing;
(b) Indebtedness of the Credit Parties consisting of the Obligations under the Loan Documents;
(c) Indebtedness of the Credit Parties under the Term Credit Agreement and any Permitted Refinancing thereof; provided, that the aggregate amount of such Indebtedness described in this subclause (c) shall not exceed $110,000,000 plus any additional amounts permitted to be incurred pursuant to the definition of Permitted Refinancing;
(d) Indebtedness of any Credit Party outstanding as of the Amendment Effective Date and reflected on Schedule 7.02 hereto and any Permitted Refinancing thereof;
(e) unsecured Subordinated Debt incurred after the Amendment Effective Date on terms and conditions acceptable to the Administrative Agent in its sole discretion, provided that (i) the maturity date of such Subordinated Debt shall be at least one hundred and eighty (180) days following the Maturity Date (after taking in account any extension thereof) and (ii) the aggregate amount of such Subordinated Debt shall not exceed $10,000,000;
(f) Indebtedness consisting of any Investment permitted by Sections 7.01(c), (d), or (e); 121
(g) Guarantees by (i) any Credit Party of Indebtedness of any other Credit Party permitted by this Section 7.02 (other than Section 7.02(k)), (ii) any Restricted Subsidiary that is not a Credit Party of any Indebtedness of any Credit Party permitted by this Section 7.02 (other than Section 7.02(k)) and (iii) any Restricted Subsidiary that is not a Credit Party of any Indebtedness of any other Restricted Subsidiary that is also not a Credit Party permitted by this Section 7.02;
(h) Indebtedness consisting of contingent liabilities under surety bonds and similar instruments incurred in the ordinary course of business; and
(i) Indebtedness in respect of netting services, automatic clearing house arrangements, treasury management services and similar arrangements in the ordinary course of business in each ...
Restrictions on Indebtedness. Subject to the provisions of Section 9, the Borrowers and the Guarantors will not, and will not permit any of the Unrestricted Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks and Agent arising under any of the Loan Documents;
(b) current liabilities of such Persons 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 7.8;
(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 such Person 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) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business;
(f) Indebtedness in respect of reverse repurchase agreements having a term of not more than 180 days with respect to Investments described in Section 8.3(a), (b) or (e);
(g) the Subordinate Debt in an amount not to exceed $35,000,000.00, provided that repayment of such Indebtedness and any guaranty, pledge, security or other assurance of repayment thereof shall be subordinate at all times to repayment of the Obligations pursuant to a subordination agreement or other agreement substantially in the form of the Subordination Agreement or otherwise satisfactory to the Majority Banks;
(h) as to the WPH Subsidiaries, the Capitalization Loans;
(i) the Participating Equity Loans; PROVIDED, however, that the sum of the Participating Equity Loans plus the Allowed Venture Financing may not exceed $125,000,000.00 in the aggregate, provided, further, however, that such amount shall decrease to $80,000,000.00 commencing on March 31, 2002;
(j) the Allowed Venture Financing in an aggregate amount at any time not to exceed the...
Restrictions on Indebtedness. 43 9.2. Restrictions on Liens................................................46 9.3.
Restrictions on Indebtedness. The Borrower will not, and will not permit its Subsidiaries to, create, incur, assume, guarantee 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 or its Subsidiaries 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 §7.8;
(d) Indebtedness in respect of judgments only to the extent, for the period and for an amount not resulting in a Default or Event of Default;
(e) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business;
(f) subject to the provisions of §9, Non-Recourse Indebtedness of the Borrower and its Subsidiaries (other than the Guarantors, the Unencumbered Property Subsidiaries or any other Subsidiary of Borrower or a Controlled JV Entity owning an interest in a Guarantor or an Unencumbered Property Subsidiary); provided that the Borrower may provide a guaranty or indemnity with respect to Non-Recourse Exclusions in connection with such Non-Recourse Indebtedness; and
(g) subject to the provisions of §9, Indebtedness (other than Non-Recourse Indebtedness) of Borrower and its Subsidiaries. Notwithstanding anything in this Agreement to the contrary, (i) none of the Guarantors, if any, nor Unencumbered Property Subsidiaries (including without limitation any Controlled JV Entity which owns a Controlled JV Entity) shall create, incur, assume, guarantee or be or remain liable contingently or otherwise, with respect to any Indebtedness described in §8.1(f) or any Indebtedness described in §8.1(g) that is Secured Indebtedness, (ii) a Guarantor, if any, shall only provide a guaranty of other Unsecured Indebtedness of the Borrower permitted pursuant to §8.1(g), and (iii) none of the Indebtedness described in §8.1(f) or §8.1(g) that is Secured Indebtedness shall have any of the Unencumbered Properties or any interest therein or equipment related thereto ...
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. 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. (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;
Restrictions on Indebtedness. Neither Borrower will, nor will it permit any of its 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 Borrowers shall be in compliance with the Leverage Ratio set forth in Section 7.15, provided that intercompany loans owing by a Borrower are permitted only so long as such loans are subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent.