Intercompany Subordination Acknowledgement Clause Samples
The Intercompany Subordination Acknowledgement clause establishes that any debts or claims owed between affiliated companies (such as parent and subsidiary entities) are subordinated to the claims of external creditors. In practice, this means that if the company faces insolvency or liquidation, payments to related parties will only be made after all obligations to outside lenders or creditors have been satisfied. This clause is crucial for protecting the interests of third-party creditors by ensuring that intercompany debts do not take priority over external obligations, thereby reducing the risk of unfair preference within corporate groups.
Intercompany Subordination Acknowledgement. A. Each of the Parties hereby acknowledges (x) the Credit Agreement and each other Credit Documents and the transactions contemplated thereby (including, without limitation, the extensions of credit contemplated therein) and (y) copies (or originals) of the Credit Documents and all opinions, instruments, certificates and all other documents delivered in connection therewith, as in effect on the Amendment No. 3 Effective Date, have been furnished or otherwise been provided (or made available) to a senior financial officer of such Foreign Subsidiary Guarantor.
B. Each of the undersigned Parties hereby acknowledges and agrees, and represents and warrants, that on and after the occurrence of, and after giving effect to, the Amendment No. 3 Effective Date (i) it constitutes a Party (as defined in the Intercompany Subordination Agreement) which is a party to the Intercompany Subordination Agreement, (ii) the Intercompany Subordination Agreement shall remain in full force and effect with respect to such Party and (iii) the Credit Agreement and the Obligations under the Credit Agreement shall constitute the “Credit Agreement” and the “Credit Document Obligations,” respectively, in each case, under and as defined in, the Intercompany Subordination Agreement and shall continue to be entitled to the benefits of the Intercompany Subordination Agreement. Each of the undersigned Assignors hereby makes each of the representations and warranties contained in the Intercompany Subordination Agreement on the Restatement Effective Date, both before and after giving effect to this Acknowledgement and Amendment.
Intercompany Subordination Acknowledgement. Each of the Parties hereby acknowledges (x) the Credit Agreement and each other Credit Documents and the transactions contemplated thereby (including, without limitation, the extensions of credit contemplated therein) and (y) copies (or originals) of the Credit Documents and all opinions, instruments, certificates and all other documents delivered in connection therewith, as in effect on the Restatement Effective Date, have been furnished or otherwise been provided (or made available) to a senior financial officer of such Foreign Subsidiary Guarantor.