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 Effective Date 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 Obligations, 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 hereunder;
(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 at any time outstanding permitted by this Section 7.01(d), when combined with the aggregate principal amount of all Capital Lease Obligations incurred pursuant to Section 7.01(e) and then outstanding and all Indebtedness incurred pursuant to Section 7.01(f) and then outstanding, shall not exceed 15% of Consolidated Net Worth;
(e) Capital Lease Obligations in an aggregate principal amount at any time outstanding, when combined with the aggregate principal amount of all Indebtedness incurred pursuant to Section 7.01(d) and then outstanding and Section 7.01(f) and then outstanding, not to exceed 15% of Consolidated Net Worth;
(f) Indebtedness of any Person that becomes a Subsidiary after the Effective Date; 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 at any time outstanding permitted b...
Subsidiary Indebtedness. Borrower will not permit any of its Subsidiaries to contract, create, incur, assume or permit to exist any Indebtedness, other than:
(a) Indebtedness in respect of current accounts payable and accrued expenses incurred in the ordinary course of business;
(b) Indebtedness owing by a Subsidiary of Borrower to Holdings or a Subsidiary of Holdings;
(c) purchase money Indebtedness to finance the acquisition, construction, or improvement, or capital lease of assets (including equipment) or property; provided that (i) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed and all fees, costs and expenses relating thereto, including attorney and legal, accounting, expert, and professional advisor fees and expenses; and (ii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing plus all fees, costs and expenses relating thereto, including attorney and legal, accounting, expert, and professional advisor fees and expenses;
(d) Indebtedness incurred after the Closing Date in connection with the acquisition of a person or property (including by consolidation or merger) as long as such Indebtedness existed prior to such acquisition and was not created in anticipation thereof;
(e) Indebtedness existing on the Closing Date;
(f) Indebtedness under performance guaranties, performance bonds and letters of credit issued in the ordinary course of business and serving as a performance guaranty;
(g) Indebtedness under documentary credits issued in connection with the purchase of goods in the ordinary course of business;
(h) 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;
(i) any other Indebtedness in a principal amount not to exceed ten percent (10%) of Consolidated Net Tangible Assets in the aggregate, at any one time outstanding;
(j) Indebtedness not otherwise permitted under any other clause of this Section 9.06 so long as each Subsidiary of Borrower incurring such Indebtedness has delivered to the Administrative Agent (A) a guaranty in a form and substance reasonably satisfactory to the Administrative Agent and (B) a certificate of a Responsible Officer certifying the adoption of board resolutions author...
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 (unless such Subsidiary has guaranteed the Obligations pursuant to a guarantee which is reasonably satisfactory to the Administrative Agent) to create, incur, assume or permit to exist any Debt, or become or remain liable (contingent or otherwise) to do any of the foregoing, except for the following:
(i) Debt of any Subsidiary of the Borrower existing on the date hereof and listed on Schedule II and extensions, renewals and replacements of any such Debt; provided that such extending, renewal or replacement Debt (i) shall not be Debt of an obligor that was not an obligor with respect to the Debt being extended, renewed or replaced, (ii) shall not be in a principal amount that exceeds the principal amount of the Debt being extended, renewed or replaced (plus any accrued but unpaid interest and redemption premium payable by the terms of such Debt thereon and reasonable refinancing or renewal fees, costs and expenses), (iii) shall not have an earlier maturity date or shorter weighted average life than the Debt being extended, renewed or replaced and (iv) shall be subordinated to the Debt incurred hereunder on terms (if any) at least as favorable to the Lenders as the Debt being extended, renewed or replaced;
(ii) guarantees by any Subsidiary of the Borrower of Debt of other Subsidiaries of the Borrower otherwise permitted under this Section 5.02(f);
(iii) Debt owed by Subsidiaries of the Borrower to the Borrower or any of its Subsidiaries;
(iv) Debt of any Receivables Subsidiary in connection with any Permitted Securitization;
(v) Debt of any Subsidiary of the Borrower incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Debt assumed by any Subsidiary of the Borrower in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided that such Debt is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement;
(vi) Debt of any Subsidiary of the Borrower in respect of letters of credit issued on behalf of such Subsidiary in the ordinary course of business;
(vii) Debt owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuan...
Subsidiary Indebtedness. The Borrower will not permit any of its Subsidiaries to contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness set forth on Schedule 7.5 (and any renewals, refinancings or extensions thereof on terms and conditions no more favorable, in the aggregate, to such creditor than such existing Indebtedness and in a principal amount not in excess of that outstanding as of the date of such renewal, refinancing or extension);
(b) intercompany Indebtedness owed by a Subsidiary of the Borrower to the Borrower or to one or more wholly-owned Subsidiaries of the Borrower;
(c) Indebtedness of the Subsidiaries (excluding intercompany Indebtedness owed to the Borrower or to one or more wholly-owned Subsidiaries of the Borrower) incurred after the Closing Date to provide all or a portion of the purchase price of short-lived assets (such as trucks and computer equipment) which may be treated as Capital Leases in accordance with GAAP;
(d) Indebtedness of the Subsidiaries (excluding intercompany Indebtedness owed to the Borrower or to one or more wholly-owned Subsidiaries of the Borrower) incurred in connection with synthetic leases, tax retention operating leases, off-balance sheet loans or similar off-balance sheet financings in an aggregate amount not to exceed $150,000,000 in any two consecutive fiscal years; and
(e) other Indebtedness of the Subsidiaries (excluding intercompany Indebtedness owed to the Borrower or to one or more wholly-owned Subsidiaries of the Borrower) in an aggregate principal amount not to exceed, at any time outstanding, together with Indebtedness secured by Liens permitted pursuant to clause (xvii) of the definition of “Permitted Liens”, 10% of Consolidated Net Tangible Assets.
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 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. 83 6.03 Liens ................................................................................................................................ 85 6.04
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.