New Subsidiary Requirements Clause Samples
The "New Subsidiary Requirements" clause sets out the obligations and procedures that must be followed when a party to the agreement establishes or acquires a new subsidiary. Typically, this clause requires the parent company to notify the other party of the new subsidiary and may mandate that the subsidiary adhere to certain terms of the original agreement, such as confidentiality or compliance standards. By doing so, the clause ensures that the contractual obligations extend to new entities within the corporate group, preventing circumvention of the agreement and maintaining consistent standards across all related companies.
New Subsidiary Requirements. Concurrently with the acquisition or formation of any subsidiary which is to be a Restricted Subsidiary and prior to the Borrower’s advancing or contributing any amounts to or into such Restricted Subsidiary (other than de minimum organizational costs such as filing fees), the Borrower shall cause to be delivered to the Administrative Agent for the benefit of the Lenders, (i) the Guaranty and a Security Agreement executed by such Restricted Subsidiary, (ii) a Security Agreement covering the Equity Interests of such Restricted Subsidiary, (iii) stock certificates or other instruments representing all the Equity Interests of such Restricted Subsidiary and stock powers and instruments of transfer, endorsed in blank, with respect to such stock certificates or other instruments, or, if any Equity Interests pledged pursuant to such Security Agreement are uncertificated securities, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent in accordance with the UCC, (iv) all documents and instruments, including UCC Financing Statements (Form UCC-1), required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create or perfect the Liens intended to be created under each Security Agreement, (v) UCC searches, all dated reasonably close to the date of the Security Agreements and in form and substance satisfactory to the Administrative Agent, and evidence reasonably satisfactory to the Administrative Agent that any Liens indicated in such UCC searches are Excepted Liens or have been released, (vi) the corporate resolutions or similar approval documents of such Restricted Subsidiary approving the execution and delivery of the Guaranty and the Security Agreement by such Restricted Subsidiary, (vii) the corporate resolutions or similar approval documents of the Borrower or other Loan Party approving the execution and delivery of the Security Agreement by the Borrower or other Loan Party, and (viii) the legal opinion acceptable to the Administrative Agent, opining favorably on the execution, delivery and enforceability of the Guaranty and the Security Agreements and otherwise being in form and substance reasonably satisfactory to the Administrative Agent and its counsel.
New Subsidiary Requirements. The Administrative Agent hereby waives (and each Lender hereto authorizes the Administrative Agent to waive) the New Subsidiary Requirements with respect to Newco so long as (i) Newco merges with and into Great Lakes on its date of formation or incorporation of Newco, as applicable, and (ii) Great Lakes delivers to the Administrative Agent a certificate evidencing the consummation of the merger of Newco and Great Lakes from the office of the Secretary of State of the State of Delaware within 5 days of the date of the formation or incorporation, as applicable, of Newco (the “Merger Evidence”). If any of the requirements in clauses (i) or (ii) of the foregoing are not satisfied, Newco shall promptly comply with the New Subsidiary Requirements.