Passive Holding Companies Clause Samples
A Passive Holding Companies clause defines the treatment and role of entities that exist primarily to hold investments or assets without engaging in active business operations. Typically, this clause clarifies whether such companies are subject to the same obligations, restrictions, or representations as operating companies within the agreement. For example, it may specify that passive holding companies are excluded from certain covenants or compliance requirements that are only relevant to active business entities. The core function of this clause is to ensure that the agreement appropriately distinguishes between active and passive entities, thereby preventing unnecessary or impractical obligations from being imposed on companies that do not conduct business activities.
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Passive Holding Companies. Permit any Subsidiary of Ultimate Parent that is a direct or indirect parent of Intermediate Parent (other than any such Subsidiary that becomes a Subsidiary Guarantor) and, prior to the Discharge of the Tranche A-2 Loans (as defined under the Actavis Term Loan Agreement) or the guarantee thereof by Ultimate Parent, Ultimate Parent (each such Subsidiary and, as long as applicable, Ultimate Parent, the “Passive Holding Companies”), to conduct, transact or otherwise engage in any active trade or business or operations other than through a Subsidiary of Intermediate Parent; provided that the foregoing will not prohibit any Passive Holding Company from taking actions related to the following (and activities incidental thereto): (i) its ownership of the Equity Interests of its direct Wholly Owned Subsidiaries, which are direct or indirect ultimate parents of Intermediate Parent, (ii) the maintenance of its legal existence and, with respect to Ultimate Parent, status as a public company (including the ability to incur fees, costs and expenses relating to such maintenance), (iii) the performance of its obligations with respect to the Merger Agreement, the Amendment Agreement, this Agreement, the Actavis Revolving Credit Agreement, the Actavis Term Loan Credit Agreement, the Cash Bridge Credit Agreement, the Notes Bridge Agreement, any other Indebtedness in respect of which it is an obligor and any other agreement to which it is a party, (iv) with respect to Ultimate Parent, any public offering of its common stock or with respect to any Passive Holding Company (other than Ultimate Parent) any other issuance of its Equity Interests, (v) the making of Restricted Payments, (vi) the incurrence of Indebtedness, (vii) the making of contributions to (or other equity investments in) the capital of its direct Subsidiaries, (viii) the creation of a newly formed Subsidiary with capitalization of less than $1,000,000 and which is formed solely for the purpose of consummating an acquisition by Ultimate Parent so long as, within six months (or such later time as may be reasonably requested in writing by Ultimate Parent and accepted by the Administrative Agent) such newly formed Subsidiary merges with and into a target entity and the survivor thereof becomes a Subsidiary of Intermediate Parent or its Subsidiaries), (ix) providing a Guarantee of Indebtedness or other obligations of its Subsidiaries, (x) participating in tax, accounting and other administrative matters as a member...
Passive Holding Companies. Permit any Subsidiary of Ultimate Parent that is a direct or indirect parent of Intermediate Parent (other than any such Subsidiary that becomes a Subsidiary Guarantor) and, prior to the discharge of the Tranche A-2 Loans (as defined under the Actavis Term Loan Credit Agreement) or the guarantee thereof by Intermediate Parent, Ultimate Parent (each such Subsidiary and, as long as applicable, Ultimate Parent, the “Passive Holding Companies”), to conduct, transact or otherwise engage in any active trade or business or operations other than through a Subsidiary of Intermediate Parent; provided that the foregoing will not prohibit any Passive Holding Company from taking actions related to the following (and activities incidental thereto): (i) its ownership of the Equity Interests of its direct Wholly Owned Subsidiaries, which are direct or indirect ultimate parents of Intermediate Parent, (ii) the maintenance of its legal existence and, with respect to Ultimate Parent, status as a public company (including the ability to incur fees, costs and expenses relating to such maintenance), (iii) the performance of its obligations with respect to the Merger Agreement, the Second Amendment Agreement, this Agreement, the Actavis Term Loan Credit Agreement, the WC Term Loan Credit Agreement, the Cash Bridge Credit Agreement, any other Indebtedness in respect of which it is an obligor and any other agreement to which it is a party, (iv) with respect to Ultimate Parent, any public offering of its common stock or with respect to any Passive Holding Company (other than Ultimate Parent) any other issuance of its Equity Interests, (v) the making of Restricted Payments, (vi) the incurrence of Indebtedness, (vii) the making of contributions to (or other equity investments in) the capital of its direct Subsidiaries, (viii) the creation of a newly formed Subsidiary with capitalization of less than $1,000,000 and which is formed solely for the purpose of consummating an acquisition by Ultimate Parent so long as, within six months (or such later time as may be reasonably requested in writing by Ultimate Parent and accepted by the Administrative Agent) such newly formed Subsidiary merges with and into a target entity and the survivor thereof becomes a Subsidiary of Intermediate Parent or its Subsidiaries, (ix) providing a Guarantee of Indebtedness or other obligations of its Subsidiaries, (x) participating in tax, accounting and other administrative matters as a member or parent of th...