Limitation on Liens Negative Covenant Clauses
(Credit Agreement)

Summary

These Limitation on Liens Negative Covenant clauses for a credit agreement are used in a syndicated loan transaction. The clauses are used to prohibit the borrower and loan parties from incurring encumbrances on their assets, with exceptions for carve-outs and baskets. These clauses include practical guidance and drafting notes. The clauses should be read in conjunction with the practice note Negative Covenants in Credit Agreements. For a full listing of key content covering a credit agreement, see Credit Agreement Resource Kit.