Restrictions on Indebtedness Clause Samples

The "Restrictions on Indebtedness" clause limits a party’s ability to incur new debt or financial obligations during the term of an agreement. Typically, this clause outlines specific thresholds or conditions under which additional borrowing is permitted, such as requiring lender consent for loans above a certain amount or prohibiting certain types of debt altogether. Its core function is to protect the interests of the other party—often a lender or investor—by preventing excessive leverage that could jeopardize the borrower’s financial stability or the value of collateral.

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Restrictions on Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: (a) Indebtedness to the Lenders and the Administrative Agent arising under any of the Loan Documents; (b) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of §8.8; (c) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Borrower or such Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; (d) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; (e) Subordinated Debt; (f) Indebtedness (in addition to similar Indebtedness permitted under clause (g) hereof) incurred in connection with the acquisition or lease after the date hereof of any real or personal property by the Borrower or such Subsidiary or under any Capitalized Leases, provided that (i) the aggregate principal amount of such Indebtedness of the Borrower and its Subsidiaries (exclusive of the aggregate principal amount of Nonrecourse Loans) shall not exceed $25,000,000 outstanding at any one time and (ii) the principal amount of such Indebtedness secured by or relating to the lease of any particular property shall not exceed 100% of the purchase price of such property; (g) Indebtedness existing on the date hereof and listed and described on Schedule 9.1 hereto; and (h) any renewal or refinancing of any Indebtedness permitted under this §9.1; provided that any such refinancing or renewal does not (i) increase the aggregate amount of such Indebtedness, (ii) increase the interest rate or fees applicable to, or shorten the weighted average life to maturity of, such Indebtedness, (iii) change, alter or modify the terms of such Indebtedness in any manner which violates either §9.8 hereof or the Subordination and Intercreditor Agreement or (iv) add to the collateral, if any, securing such Indebtedness; (i) Indebtedness of the Borrower and its Su...

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Restrictions on Indebtedness. 43 9.2. Restrictions on Liens................................................46 9.3.

Restrictions on Indebtedness. None of the Borrowers will, nor will permit any of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: (a) Indebtedness to the Lenders and the Administrative Agent arising under any of the Loan Documents; (b) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; (c) Indebtedness incurred in connection with the acquisition of any real or personal property by such Borrower or such Subsidiary or under any Capitalized Lease, and any refinancings, renewals and replacements thereof which contain terms no more onerous to the Borrowers than the Indebtedness so refinanced, renewed or replaced, provided that the aggregate principal amount of such Indebtedness (including any such Indebtedness outstanding on the Closing Date) of all of the Borrowers and their Subsidiaries shall not exceed the aggregate amount of $10,000,000 at any one time; (d) Indebtedness in respect of interest rate agreements, swaps or similar arrangements entered into to protect the Borrowers from changes in interest rates and not for speculative purposes; (e) Indebtedness not otherwise permitted by this § 10.1 existing on the Closing Date and listed and described on Schedule 10.1 hereto and any refinancings thereof not to exceed such original principal amount and on terms and conditions substantially similar thereto; and (i) Indebtedness evidenced by the Intercompany Canadian Loan Documents in an outstanding aggregate amount not to exceed $20,000,000 at any time during the term of this Credit Agreement, provided that on or following the Closing Date no incurrence of Indebtedness shall be permitted hereunder under the Intercompany Canadian Loan Documents if a Default or Event of Default is then continuing or would result therefrom, and (ii)(A) Indebtedness of the Domestic Borrower or any U.S. Subsidiary Guarantor owing to the Canadian Borrower, (B) Indebtedness of any Subsidiary of the Canadian Borrower that is a Guarantor owing to the Canadian Borrower, and (C) Indebtedness of any U.S. Subsidiary Guarantor owing to the Domestic Borrower or to any other U.S. Subsidiary Guarantor, provided that all such intercompany Indebtedness identified in clauses (A), (B) and (C) herein shall be subordinated to the Obligations on terms satisfactory to the Administrative Agent; (g) guarantees by a Borrower or a Subsidiary...

Restrictions on Indebtedness. None of the Borrowers shall become or be a guarantor or surety of, or otherwise create, incur, assume, or be or remain liable, contingently or otherwise, with respect to any Indebtedness, or become or be responsible in any manner (whether by agreement to purchase any obligations, stock, assets, goods or services, or to supply or advance any funds, assets, goods or services or otherwise) with respect to any undertaking or Indebtedness of any other Person, or incur any Indebtedness other than: (a) Indebtedness to the Banks and the Agent arising under this Agreement or the Loan Documents; (b) Subject to 8.9, Subordinated Debt in an aggregate outstanding principal amount not to exceed $15,000,000; (c) Existing Indebtedness with respect to loans and capitalized leases listed on Schedule 8.1(c) hereto in an aggregate amount not to exceed $7,500,000, on the terms and conditions in effect as of the date hereof, together with any renewals, extensions or refinancings thereof on terms which are not materially different than those in effect as of the date hereof; (d) Current liabilities incurred in the ordinary course of business not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services; (e) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of 7.8 and Indebtedness of the Borrowers secured by liens of carriers, warehousemen, mechanics and materialmen permitted by 8.2; (f) Indebtedness in respect of judgments or awards which have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which any Borrower shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review and in respect of which the Borrowers have maintained adequate reserves; (g) Indebtedness of any Borrower with respect to guaranty, suretyship or indemnification obligations in connection with such Borrower's performance of services for its respective customers in the ordinary course of its business; (h) [Intentionally omitted]; (i) Indebtedness of any Subsidiary owing...

Restrictions on Indebtedness. The Apparel Obligors will not create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: Indebtedness to the Lenders and the Administrative Agent arising under any of the Loan Documents; current liabilities of such Apparel Obligor incurred in the ordinary course of business not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services; Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of ss.8.8; Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which such Borrower or such Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; obligations under Capitalized Leases not exceeding $2,500,000 in aggregate amount for all Apparel Obligors at any time outstanding; Indebtedness incurred in connection with the acquisition after the date hereof of any real or personal property by such Apparel Obligor, provided that the aggregate principal amount of all such Indebtedness of all Apparel Obligors shall not exceed the aggregate amount of $1,000,000 at any one time; and further, provided that the aggregate amount of indebtedness permitted under this clause (g) and the immediately preceding clause (f) of this ss.9.1 shall not at any time together exceed $2,500,000. Indebtedness of the Guarantor under its License Shoe Guaranty; Indebtedness existing on the date hereof and listed and described on Schedule 9.1 hereto; obligations of any Apparel Obligor under any lease treated as an operating lease; Indebtedness to any Lender under interest rate swap agreements or similar interest rate protection agreements; Indebtedness of the Guarantor under any guarantee of the obligations of its Subsidiaries provided, that such obligations are incurred in t...

Restrictions on Indebtedness. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt); provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt), and any Restricted Subsidiary of the Company (other than a Bankrupt Subsidiary) may incur Acquired Debt not incurred by the acquired Person in contemplation of the related acquisition of such Person by such Restricted Subsidiary, if the Company's Consolidated Coverage Ratio at the time of incurrence of such Indebtedness, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom, as if the same had occurred at the beginning of the most recently ended four fiscal quarter period of the Company (commencing on or after the Issue Date) for which internal financial statements are available, would have been no less than 2.00 to 1.00. (b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (1) the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under the Credit Agreements in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $280.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied to repay Indebtedness under the Credit Agreements in order to comply with Section 4.10(b); (2) the incurrence by the Company of Indebtedness consisting solely of its obligations under Insurance Premium Financing Arrangements, which obligations shall not exceed at any time $30.0 million in the aggregate; (3) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, including without limitation the Unsecured Notes; (4) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date; (5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations incurred for the purpose of financing al...

Restrictions on Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: (a) Indebtedness to the Lenders arising under any of the Loan Documents; (b) current liabilities of the Borrower or its Subsidiaries incurred in the ordinary course of business but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services; (c) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of Section 7.8; (d) Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Borrower or the relevant Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; (e) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; and

Restrictions on Indebtedness. None of the Credit Parties nor any of its Subsidiaries will incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: (a) Indebtedness of not more than $3,000,000 outstanding at any one time secured by purchase money security interests and Capitalized Leases permitted by Section 7.03(a)(vi); (b) Indebtedness of the Credit Parties consisting of the Obligations under the Loan Documents; (c) [Reserved]; (d) Indebtedness in respect of Swap Contracts entered into not for speculative purposes in the ordinary course of business; (e) unsecured Subordinated Debt incurred after the Closing Date on terms and conditions acceptable to the Administrative Agent in its sole discretion, provided that (i) the maturity date of such Subordinated Debt shall be at least one hundred and eighty (180) days following the Maturity Date (after taking in account any extension thereof) and (ii) the aggregate amount of such Subordinated Debt shall not exceed $2,000,000; (f) Indebtedness consisting of intercompany loans and advances permitted by Section 7.01; provided that i4c shall not incur any such Indebtedness or accept such advances directly or indirectly other than (i) as a result of the fair and reasonable allocation of overhead and administrative expenses among the Credit Parties or (ii) only as described in Section 7.01(c); (g) Guarantees by any Credit Party of Indebtedness of any other Credit Party permitted by this Section 7.02; (h) Indebtedness consisting of contingent liabilities under surety bonds, performance bonds and similar instruments incurred in the ordinary course of business; (i) unsecured Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is (A) extinguished within three (3) Business Days of the incurrence thereof, and (B) incurred in the ordinary course of business in respect of pooled accounts and similar arrangements, in each case, in connection with cash management and deposit accounts in the ordinary course of business, provided further that any Indebtedness arising under this clause (i) shall not exceed $100,000; (j) Indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards and automated clearing hous...

Restrictions on Indebtedness. The Company will not permit any Operating Subsidiary of the Company to create, incur, assume, guarantee or be or remain liable with respect to, contingently or otherwise, any Indebtedness other than: (a) Intercompany Indebtedness of Operating Subsidiaries of the Company; (b) Indebtedness of Foreign Subsidiaries, provided that the aggregate amount of such Indebtedness guaranteed by the Company and outstanding at any time shall not exceed the sum of (i) the Foreign Sublimit and (ii) $25,000,000; (c) Subordinated Debt or other long term unsecured Indebtedness having a maturity at least one (1) year after the Final Maturity Date and providing for no payments of principal prior to the Final Maturity Date; provided that, in the case of the incurrence of additional Subordinated Debt or other long term unsecured Indebtedness by such Subsidiary after the Effective Date, (i) the Company applies the net cash proceeds of such additional Subordinated Debt or other long term unsecured Indebtedness in accordance with 2.10(a)(iii) and (ii) no Default or Event of Default has occurred and is continuing at the time of the incurrence of such additional Indebtedness or would result after giving effect thereto; (d) Indebtedness incurred in connection with the acquisition after the date hereof of any real or personal property by such Operating Subsidiary or under any Page 91 Capitalized Lease, provided that the aggregate principal amount of such Indebtedness of the Operating Subsidiaries shall not exceed the aggregate amount of $10,000,000 at any one time; (e) Indebtedness to the Banks and the Agent arising under any of the Loan Documents; (f) sales of receivables in connection with asset dispositions permitted under 10.5.2; (g) other Indebtedness existing on the date hereof and described on Schedule 10.1 hereto; (h) Indebtedness in respect of Interest Hedging Agreements in an aggregate amount not to exceed, in the case of Interest Hedging Agreements to which neither the Agent nor any Bank is a party, $75,000,000 outstanding at any time; and (i) other Indebtedness in an aggregate principal amount not to exceed $25,000,000 outstanding at any time.

Restrictions on Indebtedness. The Borrower will not, nor will it permit any of its Material Subsidiaries to, issue, incur, assume, create, become liable for, contingently or otherwise, or have outstanding any Indebtedness, provided that the foregoing provisions shall not restrict nor operate to prevent the following Indebtedness: (a) the Obligations; (b) any other Indebtedness so long as after giving effect to the incurrence thereof the Borrower shall be in compliance with the Leverage Ratio set forth in Section 7.15.