Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1. (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”): (i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreements; (ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facility; (iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities; (iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;” (v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v); (vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi); (vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013; (viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes; (ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed; (x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets; (xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility; (xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence; (xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008; (xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced; (xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence; (xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business; (xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition; (xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively; (xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and (xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of of, or otherwise incur, contingently or otherwise incur (collectively, “"incur”"), any Debt (including any Acquired DebtDebt and the issuance of Disqualified Stock), unless such Debt is incurred by except that the Company may incur Debt or any Guarantor andissue Disqualified Stock if, in each caseon the date of such incurrence or issuance and after giving effect thereto, the Company’s Consolidated Fixed Charge Coverage Leverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal does not exceed 2.0 to or greater than 2.00:1.
(b) 1.0. Notwithstanding the foregoing, the Company andmay, to the extent specifically set forth below, the and may permit its Restricted Subsidiaries may to, incur each and all of the following Debt (collectively, the “"Permitted Debt”"):
(i) Permitted Warehouse Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreementsSubsidiary;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facilityoutstanding on the Closing Date;
(iii) Debt of owed by the Company pursuant to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Securities issued on Company or any other Restricted Subsidiary (provided that such Debt is held by the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities Company or such Exchange SecuritiesRestricted Subsidiary);
(iv) Debt represented by the Notes and any guarantees thereof by Restricted Subsidiaries;
(v) Debt of the Company or any Restricted Subsidiary outstanding on in respect of Hedging Obligations incurred in the Issue Date and not otherwise referred to in this definition ordinary course of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v)business;
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person either (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect theretoA) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013;
(viii) obligations Capitalized Lease Obligations of the Company or any Restricted Subsidiary or (aB) pursuant to Interest Rate Agreements related to Debt as under purchase money mortgages or secured by purchase money security interests so long as such obligations do not exceed the aggregate principal amount of (x) such Debt then outstanding, (b) under is not secured by any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt property or other obligations assets of the Company or any Restricted Subsidiary outstanding other than as a result the property and assets so acquired and (y) such Debt is created within 60 days of fluctuations in foreign currency exchange rates or by reason the acquisition of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the related property; provided that the aggregate amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (bA) and (cB) such agreements are does not entered into for speculative purposesexceed in the aggregate $5 million at any one time outstanding;
(ixvii) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations consisting of guarantees, indemnities or Purchase Money Obligations or other Debt incurred or assumed obligations in connection with the acquisition or development respect of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred adjustments in connection with the acquisition or disposition of any business or assets, including, without limitation, shares of Capital Stock;
(xiviii) Acquired Debt of a Person, other than Debt incurred by the Company in connection with, or any in contemplation of, such Person becoming a Restricted Subsidiary constituting reimbursement obligations with respect to letters or the acquisition of creditassets from such Person, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon as the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Companycase may be, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can on a pro forma basis could incur $1.00 of additional Debt (other than Permitted Debt) under pursuant to the first paragraph (a) above after giving effect to such incurrenceof this Section;
(xiiiix) guarantees Debt of the Company, not permitted by the Company any other clause of this definition, in an aggregate principal amount not to exceed $20 million at any one time outstanding;
(x) Debt incurred under one or a Restricted Subsidiary of more working capital facilities in an amount not to exceed $10 million at any one time outstanding;
(xi) Debt of the Company or any Restricted Subsidiary, which Debt is in the form of a Restricted Subsidiary guarantee and is incurred in connection with a securitization or sale of Receivables; provided, that was permitted the Company has concluded (as determined in good faith by the Board of Directors of the Company) that the incurrence of such Debt is necessary to be incurred under this Section 1008;obtain an investment grade rating for other Debt issued in connection with such securitization or sale of Receivables; and
(xivxii) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectivelyeach, for purposes of this clause, a “"refinancing”") of any outstanding Debt, other than Debt incurred pursuant to paragraph clause (a) above or clauses (iiii), (ivvi), (ix), (x) and this clause or (xivxi) of this Section 1008(b)definition, including any successive refinancings thereof, so long as: as (A) the borrower under any such refinancing new Debt is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate in a principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) that does not exceed the initial principal amount of such Debt so refinanced, plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of any premium or other payment actually paid at reasonably determined by the Company as necessary to accomplish such time to refinance the Debtrefinancing, plus, in either case, plus the amount of the expenses of the Company incurred in connection with such refinancing; , (CB) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated subordinate to the Securities Notes at least to the same extent as the Debt being refinanced; refinanced and (DC) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed have an Average Life less than the principal amount Average Life of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extendedrefinanced and does not have a final scheduled maturity earlier than the final scheduled maturity, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on permit redemption at the currency exchange rate applicable to option of the currencies in which such respective Debt is denominated that is in effect on holder earlier than the earliest date of such extensionredemption at the option of the holder, replacement, refunding, refinancing, renewal or defeasanceof the Debt being refinanced.
Appears in 1 contract
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 1,900,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facility;
(iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 101310.13;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) (a) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction construction, improvement or improvement development of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 300,000,000 and (ii) 24% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed; and (b) Debt consisting of obligations incurred under mortgage facilities of the Company and any Restricted Subsidiary in an aggregate principal amount not to exceed $100,000,000 at any one time outstanding;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 600,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 100810.8;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b10.8(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 100810.8, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge or to defease the Securities as described in Article Four or Article Twelve Fifteen hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 300,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 100810.8, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 100810.8, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 10.8 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 10.8 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 10.8 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Samples: Third Supplemental Indenture (Penske Automotive Group, Inc.)
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 1,600,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facility;
(iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 101310.13;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 200,000,000 and (ii) 24% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 600,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 100810.08;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b10.08(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 100810.8, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge or to defease the Securities as described in Article Four or Article Twelve Fifteen hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 200,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 100810.8, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 100810.8, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 10.8 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 10.8 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 10.8 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Samples: First Supplemental Indenture (Penske Automotive Group, Inc.)
Limitation on Debt. No MGM Company will incur or at any time be liable with respect to any Debt except:
(a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.under this Agreement;
(b) Notwithstanding the foregoingDebt in respect of foreign distribution arrangements, the Company andin an aggregate principal amount not in excess of $20,000,000 at any one time;
(c) Debt secured by Liens permitted by Sections 5.10(a), to the extent specifically set forth below5.10(c), the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):5.10(d) or 5.10(f);
(i) Debt of the Company Borrower owed to a Guarantor, or any Restricted Debt of a Guarantor owed to the Borrower or to another Guarantor, or Debt of a Foreign Subsidiary under the Credit Agreement, any Credit Facility owed to another Foreign Subsidiary or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of a Foreign Subsidiary owed to the Company Borrower or any Restricted to a Guarantor and incurred in the ordinary course of business to finance operating expenditures of such Foreign Subsidiary and evidenced by a note (which may be a grid note) constituting Collateral under any Inventory Facility;
(iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit FacilityCollateral Document, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) was outstanding on the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, Effective Date or (B) in the case of all other such Debt permitted under this clause does not exceed in the aggregate principal amount at any time outstanding $55,000,000;
(e) Debt of any MGM Company incurred to finance any acquisition of fixed or capital assets permitted pursuant to Section 5.19 and any Debt of the relevant obligor refinancing such Debt; provided that the aggregate outstanding principal amount of all Debt permitted pursuant to this clause (e) does not exceed $35,000,000;
(i) Debt (other than (x) Debt of a Single Purpose Subsidiary and (y) onlyClawback Obligations) incurred in connection with the financing or refinancing of the development, production, acquisition, distribution, exhibition or exploitation of a Film or Film Related Assets or a group or slate of Films, but solely to the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than extent that in effect immediately prior under the terms of such Debt the obligations of any MGM Company with respect to such acquisition;
Debt may be satisfied by recourse only to such Film or a group or slate of Films and rights pertaining thereto and, in each case, to the proceeds thereof, (xviiiii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such DebtSingle Purpose Subsidiary, so long as such Debt complies with the provisions of clause (ii) of the definition of Single Purpose Subsidiary and (iii) Clawback Obligations;
(g) Debt in respect of Sale-Leaseback Transactions;
(h) Debt outstanding on the Effective Date and listed on Schedule 5.11;
(i) Permitted Subordinated Debt and Permitted Second Lien Debt, subject to any required payments pursuant to Section 2.04, and provided that the aggregate principal amount of all such Permitted Second Lien Debt shall not in no event exceed $100,000,000 outstanding at any one time in 300,000,000; and
(j) Debt not otherwise permitted by the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in foregoing clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify an aggregate principal or reclassify such item face amount not in excess of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on $50,000,000 at any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasancetime.
Appears in 1 contract
Limitation on Debt. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facility;
(iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such the Securities or such the Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assetsassets of a Restricted Subsidiary;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 300,000,000 plus (y) 105% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) ), and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) as the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) refinanced and the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; refinancing and (CA) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; refinanced and (DB) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an refinancing does not reduce the Average Life to Stated Maturity greater than or the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinancedsuch Debt;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued the incurrence by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) of Acquired Debt of the Company or any of its Restricted SubsidiariesDebt; provided provided, that after giving effect to such acquisition and the incurrence of such Acquired Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 50,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall will not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Samples: Indenture (United Auto Group Inc)
Limitation on Debt. The Company will not create, incur, assume or permit to exist any Debt, except:
(a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for Debt created under the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.Financing Documents;
(b) Notwithstanding Debt outstanding on the foregoingdate hereof under the Existing Indenture, the Company andbut not any refinancing, to the extent specifically set forth belowextension, the Restricted Subsidiaries may incur each renewal or refunding of such Debt (except as permitted under clauses (a) and all of the following (collectively, the “Permitted Debt”):
(i) of this Section);
(c) other Debt existing on the date hereof and identified on Schedule 5.05, but not any refinancing, extension, renewal or refunding of such Debt;
(d) Debt assumed in connection with a Business Acquisition that is permitted under Section 5.14; provided that (x) such Debt exists at the Company time of such Business Acquisition and is not created in contemplation thereof or any Restricted Subsidiary under in connection therewith, (y) the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount of Debt permitted by this clause (d) shall not exceed $30,000,000 at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreementsand (z) such Debt is unsecured except for Liens permitted by Section 5.12;
(iie) other Debt incurred within 180 days of the Company acquisition of any fixed or capital asset to finance all or any Restricted Subsidiary under part of the cost of acquiring such asset; provided that the aggregate principal amount of Debt permitted by this clause (e) shall not exceed $30,000,000 at any Inventory Facilitytime outstanding;
(iiif) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securitiessecured by Liens permitted by Section 5.12(k);
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(vg) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable Credit Party;
(whether at Stated Maturity, acceleration or otherwiseh) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt Guarantees by the Company or other obligor not permitted by this clause (v)of Debt of any Credit Party;
(vii) other unsecured Debt, Subordinated Debt or mortgage notes, in each case the proceeds of which are used exclusively to repurchase, redeem or repay any of the 2006 Notes (or Debt that refinances the 2006 Notes, or such refinancing Debt, in each case as permitted hereby) in a Restricted Subsidiary owing to transaction permitted under the Company or another Restricted Subsidiaryterms (including, without limitation, Section 5.07) of this Agreement; provided that any dispositionthat, pledge or transfer of any in each case, such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed on terms and conditions acceptable to be an incurrence each of the Security Agents in its sole discretion; and provided further that, in each case, the covenants applicable to such Debt by shall be no more restrictive than the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made covenants contained in accordance with the provisions of Section 1013;
(viii) obligations of Financing Documents; and provided further that, in each case, such Debt shall mature at least one year after the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed Termination Date; and provided further that the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do shall not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause 2006 Notes (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted refinancing Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company that is repurchased, redeemed or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary repaid; and provided further that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby permitted by this clause (or if such i) shall not exceed $100,000,000 in the aggregate from and after the Effective Date;
(j) other Debt provides for in an amount less than the aggregate principal amount thereof to be due not exceeding $20,000,000 at any time outstanding and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of that is unsecured except for Liens permitted by Section 5.12;
(Ik) the stated amount of any premium or Permitted Bonds; and
(l) other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu unsecured Debt or Subordinated Debt, as in each case the case may beproceeds of which are used exclusively to repurchase, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities redeem or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt repay any of the Company Permitted Bonds (or Debt that refinances any of its Restricted Subsidiaries arising from the honoring by a bank Permitted Bonds, or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such refinancing Debt, either in each case as permitted hereby) in a transaction permitted under the terms (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (aincluding, without limitation, Section 5.07) of this Section 1008Agreement; provided that, or (B) in each case, such Debt shall be on terms and conditions acceptable to each of the Security Agents in its sole discretion; and provided further that, in each case, the covenants applicable to such Debt shall be no more restrictive than the covenants contained in the case documents governing the applicable Permitted Bonds; and provided further that, in each case, such Debt shall mature at least one year after the Termination Date; and provided further that the aggregate principal amount of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xxl) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time 350,000,000 in the aggregate. For purposes of determining compliance with this Section 1008, in aggregate from and after the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasanceEffective Date.
Appears in 1 contract
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its No Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise Person will in any manner become directly owe or indirectly be liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Restricted Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):except:
(i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreementsObligations;
(ii) Debt capital lease obligations (excluding oil, gas or mineral leases) entered into in the ordinary course of the Company or Restricted Persons' businesses in arm's length transactions at competitive market rates under competitive terms and conditions in all respects, provided that the obligations required to be paid in any Restricted Subsidiary Fiscal Year under any Inventory Facilitysuch capital leases do not in the aggregate exceed $20,000,000 for all Restricted Persons;
(iii) unsecured Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securitiesowed among Restricted Persons;
(iv) Debt which, at the time incurred, is at prevailing market rates of interest and contains covenants and conditions and events of default no more onerous to Restricted Persons than the Company terms of this Agreement; provided that no Default or any Restricted Subsidiary outstanding on Event of Default will result from the Issue Date incurrence of such Debt and not otherwise referred to in this definition of “Permitted Debtbe continuing;”
(v) guaranties by one Restricted Person of Debt of the Company owing to a owed by another Restricted Subsidiary; provided that any Person, if such Debt of the Company owing to a Restricted Subsidiary that either (1) is not a Guarantor Restricted Debt, or (2) is unsecured and is subordinated in right allowed under subsections (i), (ii), (iii) or (iv) of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (vsubsection 5.2(a);
(vi) Debt of a the Restricted Subsidiary owing to Persons for plugging and abandonment bonds or for letters of credit issued by any Lender in place thereof which are required by regulatory authorities in the Company area of operations, and Debt of the Restricted Persons for other bonds or another Restricted Subsidiary; provided that letters of credit issued by any disposition, pledge or transfer of any Lender which are required by such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action regulatory authorities with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi)other normal oil and gas operations;
(vii) guarantees of any Restricted Subsidiary made in accordance with obligations under the provisions of Section 1013Subordinated Parent Indenture, the Subordinated Parent Debentures and the Subordinated Parent Guarantee;
(viii) obligations of the Company or any non-recourse Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long to which no Restricted Person (A) provides any guaranty or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Restricted Debt) or (B) is directly or indirectly liable (as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreementsa guarantor or otherwise); provided, howeverthat after giving effect to such Restricted Debt outstanding from time to time, that such Currency Hedging Agreements do Borrowers are not increase the Debt or other obligations in violation of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (bSections 5.2(g)(i) and (c) such agreements are not entered into for speculative purposesii);
(ix) Debt of the Company arising under forward, future, swap or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount hedging contracts permitted pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix5.2(i); and
(xxx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasanceCanadian Facility.
Appears in 1 contract
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(i) Debt of the Company or any Restricted Subsidiary under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 2,400,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facility;
(iii) Debt of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 101310.13;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;;
(ix) (a) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction construction, improvement or improvement development of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 600,000,000 and (ii) 24% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed; and (b) Debt consisting of obligations incurred under mortgage facilities of the Company and any Restricted Subsidiary in an aggregate principal amount not to exceed $600,000,000 at any one time outstanding;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 800,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 100810.8;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b10.8(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 100810.8, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge or to defease the Securities as described in Article Four or Article Twelve Fifteen hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 450,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 100810.8, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 100810.8, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 10.8 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 10.8 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 10.8 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Samples: Seventh Supplemental Indenture (Penske Automotive Group, Inc.)
Limitation on Debt. (a) The Company shall Borrower will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee incur or otherwise in at any manner become directly or indirectly time be liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), with respect to any Debt except:
(including any Acquired Debt), unless such a) Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.under this Agreement;
(b) Notwithstanding Debt owed to WHV under the foregoingWHV Agreement;
(c) Debt owed to UIP (or any successor thereto) under agreements between UIP (or such successor) and the Borrower or any of its Subsidiaries not in excess of $20,000,000 at any one time;
(d) Debt secured by Liens permitted by Section 5.09(a), (b), (c), (d) or (f);
(e) Debt of any Foreign Subsidiary owed to a Person other than the Company andBorrower, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any Guarantor or any other Foreign Subsidiary incurred for working capital purposes in an aggregate principal amount not in excess of the following (collectively, the “Permitted Debt”):$10,000,000 at any time;
(i) Debt of the Company Borrower owed to a Guarantor, or any Restricted Debt of a Guarantor owed to the Borrower or another Guarantor, or Debt of a Foreign Subsidiary under the Credit Agreement, any Credit Facility owed to another Foreign Subsidiary or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreements;
(ii) Debt of a Foreign Subsidiary owed to the Company Borrower or any Restricted a Guarantor and incurred in the ordinary course of business to finance operating expenditures of such Foreign Subsidiary and evidenced by a note (which may be a grid note) constituting Collateral under any Inventory Facilitya Pledge Agreement;
(iiig) Debt of the Company Borrower or any of its Subsidiaries incurred to finance any acquisition of fixed or capital assets permitted pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor Section 5.14 and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after relevant obligor refinancing such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor not permitted by this clause (v);
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any timeDebt; provided that the principal amount of any Debt permitted under this clause (ix) did thereof is not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financedincreased;
(xi) obligations arising from agreements by Debt (other than Debt of a Single Purpose Subsidiary) incurred in connection with the Company financing or refinancing of the development, production, acquisition, distribution, exhibition or exploitation of a Film or Film Related Assets or a Restricted Subsidiary slate of Films, but solely to provide for indemnification, customary purchase price closing adjustments, earn-outs the extent that under the terms of such Debt the obligations of the Borrower and its Subsidiaries with respect to such Debt may be satisfied by recourse only to such Film or other similar obligationsslate of Films and rights pertaining thereto and, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; proceeds thereof and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance.
Appears in 1 contract
Limitation on Debt. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries Xxxx to, createIncur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”)indirectly, any Debt (including any Acquired Debt)unless, unless on the date of such Debt is incurred by the Company or any Guarantor and, in each caseIncurrence, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal exceeds 2.0 to or greater than 2.00:11.0.
(b) Notwithstanding the foregoingforegoing paragraph (a), the Company andor Xxxx, to as the extent specifically set forth belowcase may be, the Restricted Subsidiaries may incur each and Incur any or all of the following (collectively, the “Permitted Debt”)::
(i) Debt of Incurred pursuant to the Company or any Restricted Subsidiary under Revolving Credit Facility and the Credit AgreementFacility Guaranty in respect thereof; provided, however, that, after giving effect to any Credit Facility or such Incurrence, the U.K. aggregate principal amount of such Debt then outstanding does not exceed $250 million (excluding, for purposes of calculating such aggregate principal amount, the amount of Hedging Obligations guaranteed pursuant to the Credit Agreement Guaranty).
(ii) Customer Notes Guarantees Incurred following the Issue Date in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 30 million less the amount of Customer Notes Guarantees Incurred following the Issue Date then outstanding pursuant to Section 5.05(i) and less the amount of Investments in any case under these agreements or in respect of letters of credit under these agreements;
Customer Notes made following the Issue Date then outstanding pursuant to clause (iic) Debt of the Company or any Restricted Subsidiary under any Inventory Facilitydefinition of "Permitted Investment";
(iii) Debt owed to and held by a Wholly Owned Subsidiary of the Company pursuant to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange Securities;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in this definition of “Permitted Debt;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that any Debt of the Company owing to a Restricted Subsidiary that is not a Guarantor is unsecured and is subordinated in right of payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the SecuritiesXxxx; provided, furtherhowever, that any disposition, pledge subsequent issuance or transfer of any Capital Stock which results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of such Debt to a Person (other than a disposition, pledge or transfer to a Restricted another Wholly Owned Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect theretoof Xxxx) shall be deemed deemed, in each case, to be an incurrence constitute the Incurrence of such Debt by the Company or other obligor not permitted by this clause Xxxx, as the case may be;
(iv) the Notes;
(v) Debt (including without limitation Customer Notes Guarantees) outstanding on the Issue Date (other than Debt described in clauses (i), (ii), (iii), (iv), (v), or (vii) of this Section 5.04);
(vi) Refinancing Debt in respect of a Restricted Subsidiary owing Debt Incurred pursuant to the Company paragraph (a) above or another Restricted Subsidiary; provided that any disposition, pledge pursuant to clause (iv) or transfer of any such Debt to a Person (other than a disposition, pledge v) above or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made Hedging Obligations with respect to (1) Debt permitted to be Incurred by the Company or its Subsidiaries pursuant to this Indenture or (2) transactions denominated in accordance with the provisions of Section 1013;foreign currencies; and
(viii) obligations of Debt (which Debt may, but need not, be Incurred in whole or in part under the Company or any Restricted Subsidiary (aCredit Agreement) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Valuewhich, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or together with all other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xvii) (x) Debt incurred or issued by the Company or any of its Restricted Subsidiaries to finance an acquisition and/or (y) Acquired Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition and the incurrence of such Debt, either (A) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt of the Company to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;
(xix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in Xxxx outstanding on the date of such Incurrence (other than Debt permitted by clauses (i) through (xixx) of this paragraph (b) or paragraph (a) above), and giving effect to any renewalsconcurrent Refinancing of Debt permitted by this Indenture, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall does not exceed $100,000,000 outstanding at any one time in the aggregate15 million. For purposes of determining compliance with this Section 1008covenant, (i) in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses paragraph (ib) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008), the Company Company, in its sole discretion may discretion, will classify or reclassify such item of Debt in any manner that complies with this covenant and such debt will be treated as having been incurred pursuant to only be required to include the amount of such Debt as one of such types. Accrual clauses of interestparagraph (b) or pursuant to paragraph (a); and (ii) an item of Debt may be divided and classified in more than one of the types of Debt in paragraph (b) or pursuant to paragraph (a).
(c) Notwithstanding paragraph (a) and paragraph (b) above, accretion or amortization of original issue discount and the payment of interest on Company shall not Incur any Debt in if the form of additional proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations unless such Debt with shall be subordinated to the Notes to at least the same termsextent as such Subordinated Obligations.
(d) Notwithstanding paragraph (a) and paragraph (b) above, and (i) the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock Company shall not be deemed to be an incurrence of Incur any Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred subordinated or junior in ranking in right of payment to extendany Senior Debt, replace, refund, refinance, renew unless such Debt is Senior Subordinated Debt or defease other is expressly subordinated in right of payment to Senior Subordinated Debt; and (ii) the Company shall not issue any Secured Debt denominated in a foreign currency, which is not Senior Debt unless contemporaneously therewith effective provision is made to secure the Notes equally and ratably with such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded Secured Debt for so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Secured Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasancesecured by a Lien.
Appears in 1 contract
Samples: Indenture (Goss Holdings Inc)
Limitation on Debt. (a) The Neither the Company shall not, and shall not cause or permit nor any of its Restricted Subsidiaries to, Subsidiary will create, issue, incur, assumeassume or suffer to exist any Debt, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Debt (including any Acquired Debt), unless such Debt is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt taken as one period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):except:
(i) Debt of the Company or any Restricted and the Subsidiary Guarantors under the Credit Agreement, any Credit Facility or the U.K. Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $1,250,000,000 in any case under these agreements or in respect of letters of credit under these agreementsFinancing Documents;
(ii) Debt of the Company or any Restricted Subsidiary under any Inventory Facilityof its Subsidiaries outstanding on the date of this Agreement as set forth in clause (i) of Section 5.01(b);
(iii) Debt of the Company pursuant or any of its Subsidiaries to a wholly-owned Subsidiary of the Company, or of any Subsidiary of the Company to the Securities issued on the Issue Date or the Exchange Securities issued in exchange therefor and Debt of any Guarantor pursuant to a Guarantee of such Securities or such Exchange SecuritiesCompany;
(iv) Debt of the Company or any Restricted Subsidiary outstanding on of its Subsidiaries incurred or assumed for the Issue Date and purpose of financing all or any part of the cost of acquiring any fixed asset (including through Capital Leases) after the Closing Date, in an aggregate principal amount not otherwise referred to in this definition of “Permitted Debtexceed $10,000,000;”
(v) Debt of the Company owing to a Restricted Subsidiary; provided that or any Debt Subsidiary as an account party for any letter of the Company owing to a Restricted Subsidiary that credit issued by any financial institution if such letter of credit is not a Guarantor is unsecured and is subordinated in right of issued solely as security for performance or payment from and after such time as the Securities shall become due and payable (whether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Securities; provided, further, that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the Company or other obligor such Subsidiary under any contract which is not permitted otherwise prohibited by this clause (v)Agreement and which has been entered into in the ordinary course of business of the Company or such Subsidiary;
(vi) Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an incurrence of such Debt by the obligor not permitted by this clause (vi)Cash Management Services Obligations;
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 1013;
(viii) obligations of the Company or any Restricted Subsidiary (a) pursuant to Interest Rate Agreements related to Debt as long as such obligations do not exceed the aggregate principal amount of such Debt then outstanding, (b) under any Currency Hedging Agreements; provided, however, that such Currency Hedging Agreements do not increase the Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable under such Currency Hedging Agreements or (c) under any Commodity Price Protection Agreements which do not increase the amount of Debt or other obligations of the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable under such Commodity Price Protection Agreements, and guarantees by Guarantors in respect thereof; provided that in the case of each of clauses (a), (b) and (c) such agreements are not entered into for speculative purposes;
(ix) Debt of the Company or any Restricted Subsidiary represented by Capital Lease Obligations or Purchase Money Obligations or other Debt incurred or assumed in connection with the acquisition or development on account of real or personal, movable or immovable, property in each case incurred financed insurance premiums for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (ix) not to exceed the greater of (i) $75,000,000 insurance required under Section 6.03 and (ii) 2% of the Company’s Consolidated Total Assets outstanding at any time; provided that the principal amount of any Debt permitted under this clause (ix) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(x) obligations arising from agreements by the Company or a Restricted Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with the acquisition or disposition of any business or assets;
(xi) Debt incurred otherwise maintained by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit, including letters of credit in respect of workers’ compensation claims, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims; provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing or incurrence or supported under the Credit Agreement, the U.K. Credit Agreement or any Credit Facility;
(xii) Debt of Foreign Subsidiaries in the aggregate amount outstanding pursuant to this clause (xii) at any time not to exceed (x) $450,000,000 plus (y) 10% of the Consolidated Tangible Assets of the Company, provided that Foreign Subsidiaries may not incur Debt pursuant to this clause (y) unless the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) above after giving effect to such incurrence;
(xiii) guarantees by the Company or a Restricted Subsidiary of Debt of the Company or a Restricted Subsidiary that was permitted to be incurred under this Section 1008;
(xiv) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a “refinancing”) of any Debt incurred pursuant to paragraph (a) above or clauses (iii), (iv) and this clause (xiv) of this Section 1008(b), including any successive refinancings so long as: (A) the borrower under such refinancing is the Company or, if not the Company, the same as the borrower of the Debt being refinanced; (B) the aggregate principal amount of Debt represented thereby (or if such Debt provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity of such Debt, the original issue price of such Debt plus any accreted value attributable thereto since the original issuance of such Debt) does not exceed the initial principal amount of such Debt plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Debt being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Debt, plus, in either case, the amount of the expenses of the Company incurred in connection with such refinancing; (C) in the case of any refinancing of Debt that is Subordinated Debt, such new Debt is made subordinated to the Securities at least to the same extent as the Debt being refinanced; and (D) in the case of Pari Passu Debt or Subordinated Debt, as the case may be, such new Debt (x) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of (i) the Securities or (ii) the Debt to be refinanced, and (y) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of (i) the Securities or (ii) the Debt to be refinanced;
(xv) Debt of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence;
(xvi) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xviiviii) Renewals or extensions of any Debt described in clause (xii) or (iv) above; and
(ix) Other Debt incurred or issued the terms and conditions of which shall have been approved by the Majority Holders and the Net Cash Proceeds of which are applied in accordance with Sections 2.04 and 2.07.
(b) Notwithstanding the restrictions on Debt contained in Section 6.09(a), the Company or any of its Restricted Subsidiaries to finance an acquisition and/or Subsidiary of the Company may guarantee (yi) Acquired any Debt of the Company or any of its Restricted Subsidiaries; provided that after giving effect to such acquisition Subsidiary Guarantor permitted under Section 6.09(a) and the incurrence of such Debt, either (Aii) the Company can incur $1.00 of additional Debt (other than Permitted Debt) under paragraph (a) of this Section 1008, or (B) in the case of clause (y) only, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than that in effect immediately prior to such acquisition;
(xviii) Debt any contractual obligations of the Company or any Subsidiary Guarantor incurred in the ordinary course of business, except to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Securities as described in Article Four or Article Twelve hereof, respectively;such contractual obligations constitute Debt that would be prohibited by Section 6.09(a).
(xixc) shares Neither the Company nor any Subsidiary of Preferred Stock of the Company will have any Guarantee Obligations for which the primary obligor is a Restricted Subsidiary issued to Person other than the Company or a Restricted Subsidiary of the Company; provided that any subsequent transfer of any such shares of Preferred Stock (except to the Company or a Restricted Subsidiary or a pledge to a lender under a Credit Facility, provided that such lender has not commenced an enforcement action with respect thereto) shall be deemed to be an issuance of Preferred Stock that was not permitted by this clause (xix); and
(xx) Debt of the Company and its Restricted Subsidiaries, in addition to that described in clauses (i) through (xix) above, and any renewals, extensions, substitutions, refinancings or replacements of such Debt, so long as the aggregate principal amount of all such Debt shall not exceed $100,000,000 outstanding at any one time in the aggregate. For purposes of determining compliance with this Section 1008, in the event that an item of Debt meets the criteria of more than one of the types of Debt described in clauses (i) through (xx) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1008, the Company in its sole discretion may classify or reclassify such item of Debt and only be required to include the amount of such Debt as one of such types. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Debt in the form of additional Debt with the same terms, and the payment of dividends on any Redeemable Capital Stock or Preferred Stock in the form of additional shares of the same class of Redeemable Capital Stock or Preferred Stock shall not be deemed to be an incurrence of Debt for purposes of this Section 1008 provided, in each such case, that the amount thereof as accrued over time is included in the Consolidated Fixed Charge Coverage Ratio of the Company. Debt permitted by this Section 1008 need not be permitted solely by reference to one provision permitting such Debt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 1008 permitting such Debt. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Debt denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Debt incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Debt was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Debt is incurred to extend, replace, refund, refinance, renew or defease other Debt denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being extended, replaced, refunded, refinanced, renewed or defeased. Except as provided in the prior paragraph, the principal amount of any Debt incurred to extend, replace, refund, refinance, renew or defease other Debt, if incurred in a different currency from the Debt being extended, replaced, refunded, refinanced, renewed or defeased, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasanceSubsidiary.
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