Permitted Indebtedness definition: Copy, customize, and use instantly
Introduction
The term "Permitted Indebtedness" refers to the types and amounts of debt that an entity is allowed to incur under the terms of an agreement, often defined in a loan or financing agreement. This clause sets limits on borrowing, specifying the debts that are acceptable and those that are not. It is essential to clarify what constitutes "Permitted Indebtedness" to avoid any breaches of contract or restrictions on the company’s borrowing abilities.
Below are various examples of how "Permitted Indebtedness" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Permitted Indebtedness" as debt incurred in the ordinary course of business
This definition ties "Permitted Indebtedness" to debt incurred in the ordinary course of business activities.
"Permitted Indebtedness" means any debt incurred by the company in the ordinary course of business, including trade credit, inventory financing, or operating leases, provided such debt does not exceed the aggregate limit set by the agreement.
Definition of "Permitted Indebtedness" as secured debt
This definition connects "Permitted Indebtedness" to secured debt, where assets are pledged as collateral.
"Permitted Indebtedness" refers to any indebtedness that is secured by specific assets of the company, provided the total amount does not exceed a specified percentage of the company’s assets.
Definition of "Permitted Indebtedness" as subordinated debt
This definition links "Permitted Indebtedness" to subordinated debt, which is debt ranked below other senior debts.
"Permitted Indebtedness" means subordinated debt that ranks junior to senior debt in terms of repayment priority, as long as it does not exceed the threshold specified in the financing agreement.
Definition of "Permitted Indebtedness" as debt incurred for acquisitions
This definition applies "Permitted Indebtedness" to debt incurred for the purpose of acquisitions.
"Permitted Indebtedness" refers to any indebtedness incurred by the company for the purpose of acquiring assets, businesses, or other entities, subject to the conditions and limits defined in the agreement.
Definition of "Permitted Indebtedness" as debt under a revolving credit facility
This definition ties "Permitted Indebtedness" to the use of a revolving credit facility.
"Permitted Indebtedness" means any outstanding debt under a revolving credit facility, provided such debt does not exceed the credit limit and the company maintains compliance with the financial covenants.
Definition of "Permitted Indebtedness" as capital lease obligations
This definition connects "Permitted Indebtedness" to obligations arising from capital leases.
"Permitted Indebtedness" refers to any capital lease obligations incurred by the company in connection with its use of assets under capital lease agreements, provided the terms comply with the agreement's restrictions.
Definition of "Permitted Indebtedness" as refinancing debt
This definition links "Permitted Indebtedness" to refinancing existing debt.
"Permitted Indebtedness" means any indebtedness incurred for the purpose of refinancing existing debt obligations, as long as the refinancing terms do not increase the total debt beyond an agreed limit.
Definition of "Permitted Indebtedness" as debt arising from letters of credit
This definition applies "Permitted Indebtedness" to debt arising from letters of credit.
"Permitted Indebtedness" refers to any debt resulting from the issuance of letters of credit, provided the outstanding amounts do not exceed the authorized limit set forth in the financing agreement.
Definition of "Permitted Indebtedness" as intercompany loans
This definition ties "Permitted Indebtedness" to loans between affiliated companies.
"Permitted Indebtedness" means loans made between affiliated or subsidiary companies within the corporate group, as long as such loans do not exceed the agreed limit and are not subject to restrictions on repayment terms.
Definition of "Permitted Indebtedness" as trade payables
This definition connects "Permitted Indebtedness" to trade payables that arise during business operations.
"Permitted Indebtedness" refers to trade payables incurred in the ordinary course of business for the purchase of goods and services, provided they are paid within the normal payment terms.
Definition of "Permitted Indebtedness" as unsecured debt
This definition links "Permitted Indebtedness" to unsecured debt, where no collateral is required.
"Permitted Indebtedness" means any unsecured debt issued by the company, subject to the conditions outlined in the agreement, and not exceeding the maximum debt limit set forth.
Definition of "Permitted Indebtedness" as debt incurred under certain financial ratios
This definition applies "Permitted Indebtedness" to debt incurred subject to specific financial ratios.
"Permitted Indebtedness" refers to any debt incurred by the company, provided the company maintains the required financial ratios, such as debt-to-equity, in accordance with the covenants set in the agreement.
Definition of "Permitted Indebtedness" as debt incurred due to legal obligations
This definition ties "Permitted Indebtedness" to debt resulting from legal obligations.
"Permitted Indebtedness" means any debt arising as a result of legal obligations or judgments against the company, provided it is settled within the terms agreed upon by the parties involved.
Definition of "Permitted Indebtedness" as debt related to employee compensation
This definition connects "Permitted Indebtedness" to debt related to employee compensation and benefits.
"Permitted Indebtedness" refers to any indebtedness incurred by the company to satisfy employee compensation, pension obligations, and benefits, as long as the company complies with applicable laws and regulations.
Definition of "Permitted Indebtedness" as debt incurred in connection with joint ventures
This definition applies "Permitted Indebtedness" to debt incurred in connection with joint ventures.
"Permitted Indebtedness" refers to any debt incurred by the company in connection with joint ventures or partnerships, provided such debt does not exceed the agreed-upon threshold.
Definition of "Permitted Indebtedness" as debt incurred for working capital purposes
This definition ties "Permitted Indebtedness" to debt incurred to finance working capital.
"Permitted Indebtedness" means any indebtedness incurred by the company for the purpose of financing its working capital needs, such as short-term loans or lines of credit.
Definition of "Permitted Indebtedness" as debt secured by assets
This definition connects "Permitted Indebtedness" to secured borrowing where assets are pledged as collateral.
"Permitted Indebtedness" refers to debt secured by specific assets of the company, provided the company maintains the required levels of collateral and complies with the terms outlined in the agreement.
Definition of "Permitted Indebtedness" as conditional debt
This definition links "Permitted Indebtedness" to debt that is contingent upon certain events.
"Permitted Indebtedness" means debt that is contingent upon certain events or conditions, such as performance milestones or the achievement of specific financial goals.
Definition of "Permitted Indebtedness" as debt incurred in the course of expansion
This definition applies "Permitted Indebtedness" to debt incurred for company expansion.
"Permitted Indebtedness" refers to debt incurred by the company in the course of expanding its business operations, including funding new projects, acquisitions, or capital expenditures.
Definition of "Permitted Indebtedness" as debt guaranteed by third parties
This definition ties "Permitted Indebtedness" to debt that is guaranteed by third parties.
"Permitted Indebtedness" means debt incurred by the company that is guaranteed by third parties, such as affiliates or corporate partners, and subject to the agreed terms and conditions.
Definition of "Permitted Indebtedness" as debt related to hedging arrangements
This definition connects "Permitted Indebtedness" to debt incurred for hedging purposes.
"Permitted Indebtedness" refers to any indebtedness incurred by the company as part of its hedging arrangements to manage interest rate or currency risks, within the limits specified by the agreement.
Definition of "Permitted Indebtedness" as debt incurred during a financial restructuring
This definition links "Permitted Indebtedness" to debt incurred during a financial restructuring.
"Permitted Indebtedness" means any debt incurred by the company during a financial restructuring or reorganization process, subject to approval by relevant stakeholders and in compliance with the terms of the agreement.
Definition of "Permitted Indebtedness" as debt incurred by a parent company
This definition applies "Permitted Indebtedness" to debt incurred by the parent company of the group.
"Permitted Indebtedness" refers to any debt incurred by the parent company of the corporate group, as long as it is consistent with the limitations outlined in the group’s financing agreements.
Definition of "Permitted Indebtedness" as debt associated with specific projects
This definition ties "Permitted Indebtedness" to project-specific debt.
"Permitted Indebtedness" means debt incurred specifically for the purpose of funding a particular project, with terms and conditions that align with the scope and requirements of the project.
Definition of "Permitted Indebtedness" as revolving credit agreements
This definition connects "Permitted Indebtedness" to debt incurred under revolving credit agreements.
"Permitted Indebtedness" refers to any debt incurred by the company under revolving credit agreements, provided the total outstanding debt does not exceed the facility limit set forth in the agreement.
Definition of "Permitted Indebtedness" as debt resulting from default
This definition links "Permitted Indebtedness" to debt arising from default or non-compliance.
"Permitted Indebtedness" refers to any debt resulting from default or non-compliance with prior obligations, subject to legal or contractual settlements and compliance with agreement terms.
Definition of "Permitted Indebtedness" as debt incurred due to contingencies
This definition applies "Permitted Indebtedness" to debt incurred because of contingencies.
"Permitted Indebtedness" means any debt incurred due to contingencies, such as pending litigation or unresolved claims, within the limits prescribed in the agreement.
Definition of "Permitted Indebtedness" as debt associated with tax obligations
This definition ties "Permitted Indebtedness" to debt incurred to satisfy tax obligations.
"Permitted Indebtedness" means any indebtedness incurred by the company to satisfy its tax obligations, including deferred taxes, provided such indebtedness does not exceed the prescribed threshold.
Definition of "Permitted Indebtedness" as debt under certain foreign currency obligations
This definition connects "Permitted Indebtedness" to debt arising from foreign currency obligations.
"Permitted Indebtedness" refers to debt incurred by the company in relation to its foreign currency obligations, such as foreign loans or currency hedging arrangements, provided the total debt does not exceed the limits set by the agreement.
Definition of "Permitted Indebtedness" as short-term borrowings
This definition applies "Permitted Indebtedness" to short-term borrowings used for liquidity needs.
"Permitted Indebtedness" means any short-term borrowings, including working capital loans or trade credit, that are necessary for the company's immediate liquidity needs and fall within the stipulated limits.
Definition of "Permitted Indebtedness" as debt incurred for capital improvements
This definition ties "Permitted Indebtedness" to debt incurred for capital improvements.
"Permitted Indebtedness" refers to any indebtedness incurred for capital improvements, including renovations or upgrades to company property, provided the total amount does not exceed the set percentage of the company’s net worth.
Definition of "Permitted Indebtedness" as debt arising from pension fund obligations
This definition links "Permitted Indebtedness" to debt arising from pension or retirement fund obligations.
"Permitted Indebtedness" means any debt incurred by the company to satisfy its pension fund obligations, as long as such debt does not exceed the limits imposed by the agreement and is fully accounted for in the company’s financial statements.
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