Subsidiaries’ Several Liabilities Clause Samples
The "Subsidiaries’ Several Liabilities" clause establishes that each subsidiary involved in an agreement is responsible only for its own obligations and liabilities, rather than being jointly liable with other subsidiaries. In practice, this means that if one subsidiary fails to fulfill its contractual duties or incurs a debt, the other subsidiaries are not automatically required to cover those obligations. This clause is commonly used to limit risk exposure among related entities, ensuring that financial or legal issues affecting one subsidiary do not automatically impact the others.
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Subsidiaries’ Several Liabilities. Notwithstanding anything in this Agreement to the contrary, each of the Subsidiary Borrowers shall be severally liable for the liabilities and obligations of such Subsidiary Borrower under this Agreement and its Borrowings, and Notes, if any. No Subsidiary Borrower shall be liable for the obligations of any other Borrower under this Agreement or any Borrowings of any other Borrower or any other Borrower’s Notes, if any. Each Subsidiary Borrower shall be severally liable for all payments of the principal of and interest on Advances to such Subsidiary Borrower, and any other amounts due hereunder that are specifically allocable to such Subsidiary Borrower or the Advances to such Subsidiary Borrower. With respect to any amounts due hereunder, including fees, that are not specifically allocable to a particular Borrower, each Borrower shall be liable for such amount pro rata in the same proportion as such Borrower’s outstanding Advances bear to the total of then-outstanding Advances to all Borrowers.