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. The Credit Parties will not permit any of the Restricted Subsidiaries (other than the Credit Parties (except as set forth in Section 6.3(c)(ii)) and the Pro Rata Additional Borrowers) to create, incur, assume or suffer to exist any Indebtedness except:
(A) Indebtedness existing as of the Closing Date under industrial development bonds and Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $325,000,000 and (B) Refinancing Indebtedness in respect of Indebtedness incurred under clause (A) above;
(b) Indebtedness of any Restricted Subsidiary owing to a Credit Party or any Restricted Subsidiary;
(c) other Indebtedness (whether secured or unsecured); provided that (i) at the time of incurrence of any Indebtedness under this subsection (c), the aggregate principal amount of such Indebtedness does not exceed the Priority Debt Basket at such time (determined prior to giving effect to the incurrence of such Indebtedness) and (ii) for the avoidance of doubt, any Indebtedness under this Agreement shall be considered Indebtedness incurred pursuant to this clause (c);
(d) Indebtedness and obligations owing under Hedging Agreements and/or Cash Management Agreements so long as such Hedging Agreements and/or Cash Management Agreements are not entered into for speculative purposes;
(e) Guaranty Obligations of any Restricted Subsidiary in respect of Indebtedness of the Parent or any other Restricted Subsidiary to the extent such Indebtedness is permitted to exist or be incurred pursuant to this Section 6.3;
(f) obligations of any Restricted Subsidiary in connection with (i) any Permitted Securitization Transaction, to the extent such obligations constitute Indebtedness and (ii) any inventory financing arrangements so long as the aggregate principal amount Indebtedness in respect thereof incurred under this subsection(f)(ii) does not exceed $250,000,000 at any time outstanding;
(g) Indebtedness of any Restricted Subsidiary consisting of completion guarantees, performance bonds, surety bonds or customs bonds incurred in the ordinary course of business;
(h) Indebtedness owed to any Person (including obligations in respect of letters of credit, bank guarantees and similar instruments for the benefit of such Person) providing workers’ compensation, social security, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the o...
Subsidiary Indebtedness. The Borrower shall not permit its Subsidiaries or, on or after the Redomestication Effective Date, any Subsidiary of Holdings (other than the Borrower), 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 other Members of the Consolidated Group, and intercompany loans and advances from any of such other Members of the Consolidated Group or SPVs to the Borrower or any other Members of the Consolidated Group;
(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 Member of the Consolidated Group or is merged, consolidated or amalgamated with or into the Borrower or any other Member of the Consolidated Group and not incurred in contemplation o...
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 Obligors will not permit any Subsidiary to, create, assume, incur, guarantee or otherwise become liable in respect of any Indebtedness, excluding from the operation of this Section:
(a) Indebtedness outstanding on the date of the Closing and specified in Schedule 5.15 and any extension, renewal or refunding thereof, provided that the principal amount thereof outstanding immediately before giving effect to such extension, renewal or refunding is not increased;
(b) Indebtedness of a Person outstanding at the time such Person becomes a Subsidiary (and not incurred in anticipation thereof) and any extension, renewal or refunding thereof, provided that the principal amount thereof outstanding immediately before giving effect to such extension, renewal or refunding is not increased;
(c) Indebtedness of the Guarantor or any Subsidiary Guarantor incurred after the date of the Closing;
(d) Indebtedness owing to either Obligor or any Subsidiary Guarantor; and
(e) Indebtedness of a Subsidiary in addition to that otherwise permitted by the foregoing provisions of this Section 10.7, provided that on the date the Subsidiary incurs or otherwise becomes liable with respect to any such additional Indebtedness and immediately after giving effect thereto,
(i) no Default or Event of Default exists, and
(ii) the total amount of all Indebtedness permitted to be outstanding pursuant to this Section 10.7(e) does not exceed Indebtedness permitted to be outstanding under Section 10.8.
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. 34 SECTION 6.03 Liens.............................................................................35
Subsidiary Indebtedness. Permit any Subsidiary of the Borrower to create, incur, assume or suffer to exist any liability for Indebtedness, except Indebtedness which, when aggregated with all Indebtedness of the Subsidiaries of the Borrower (other than (a) Excluded Receivables Indebtedness, (b) any Indebtedness in respect of undrawn trade letters of credit, and (c) Indebtedness under each Affected Lease), does not exceed 10% of Tangible Net Worth.
Subsidiary Indebtedness. Permit the Indebtedness of all Subsidiaries (excluding the ESOP Guaranty) to exceed (on a combined basis) 10% of Tangible Net Worth.
Subsidiary Indebtedness. The Company will not permit its Subsidiaries to create, issue, incur, assume or otherwise become liable for any Debt (excluding (a) any Debt of a Subsidiary owed to the Company or another Subsidiary and any Guarantee by a Subsidiary of Debt of the Company, (b) Debt (and any undrawn commitment therefor) in existence as of the Third Restatement Date and set forth on Schedule 6.15 and any refinancings, replacements, extensions or renewals thereof, (c) Debt incurred by any Subsidiary constituting reimbursement obligations with respect to bankers’ acceptances and letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims, or letters of credit in the nature of a security deposit (or similar deposit or security) given to a lessor under an operating lease of real property under which such Person is a lessee; provided, however, that upon the drawing of such bankers’ acceptances and letters of credit or the incurrence of such Debt, such obligations are reimbursed within 60 days following such drawing or incurrence or such Debt is otherwise permitted hereunder, (d) Debt arising from agreements of a Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a subsidiary, other than guarantees of Debt incurred by any Person acquiring all or any portion of such business, assets or a subsidiary for the purpose of financing such acquisition, (e) hedging obligations (excluding hedging obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Debt permitted under this Section 6.15, exchange rate risk or commodity pricing risk, (f) obligations in respect of customs, stay, performance, bid, appeal and surety bonds and completion guarantees and other obligations of a like nature in the ordinary course of business, (g) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Debt is extinguished within five Business Days of its incurrence, (h) Debt of any Subsidiaries incurred to finance insurance premiums in the ordinary course of business, (i) Debt representing deferred compen...