Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired Indebtedness) or any shares of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period. (b) The foregoing limitations will not apply to: (i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time; (ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding; (iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date; (iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii)); (v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets; (vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition; (viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness; (ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness; (x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; (xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee; (xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding; (A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary; (xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and (xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 2 contracts
Samples: Indenture (Kindercare Learning Centers Inc /De), Indenture (KCLC Acquisition Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of") any Indebtedness (including Acquired Indebtedness) or and that the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will Section 1010(a) shall not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million 1.0 billion outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under incurred by Restricted Subsidiaries pursuant to this clause (i) above and this clause (ii) shall does not in the aggregate exceed $550 100.0 million (or the equivalent thereof in any other currency) at any one time outstanding;
(iiiii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 200.0 million at any one time outstanding; provided, however, that (A) Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 100.0 million (or the equivalent thereof in any other currency) at any one time outstanding and (B) Indebtedness of a Restricted Subsidiary organized under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, which when aggregated with the principal amount of all other Indebtedness of such Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $100.0 million at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 10141014 hereof) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under the first paragraph (a) of this covenant and clauses (iiiii) and (iviii) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (athe provisions of Section 1010(a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 1010.
Appears in 2 contracts
Samples: Indenture (NXS I LLC), Indenture (Amphenol Corp /De/)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock (any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this paragraph, “Ratio Indebtedness”) if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company Issuer and its the Restricted Subsidiaries would be at least 2.00 to 1.00; provided, further, that the amount of Indebtedness, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with (i) any amounts incurred and outstanding pursuant to Section 4.07(b)(14)(x) and (ii) any amounts incurred and outstanding pursuant to Section 4.07(b)(13) (but solely to the extent such Refinancing Indebtedness is in respect of (x) Ratio Indebtedness or (y) Indebtedness incurred pursuant to Section 4.07(b)(14)(x)) by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $200 million and (y) 25.0% of EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been Test Period at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) the incurrence Indebtedness incurred pursuant to Credit Facilities by the Company Issuer or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the then-outstanding aggregate principal amount of all Indebtedness incurred pursuant to this clause (1) (in the case of clause (B), taken together with the amount of any outstanding Refinancing Indebtedness incurred pursuant to clause (13) below in respect of Indebtedness under incurred pursuant to clause (B)) does not exceed at any one time the Senior Credit Facility sum of (A) $2,000 million and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal B) an amount equal to the face amount thereofgreater of (x) up to an aggregate principal amount $400 million and (y) 50.0% of $550 million outstanding EBITDA for the most recently ended Test Period at any one timethe time of the incurrence;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date(including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iv3) Existing Indebtedness, including Indebtedness (or guarantees thereof) of Arconic that shall become an obligation of the Issuer or any Restricted Subsidiary pursuant to the Spin-Off Documents as in effect on the Escrow Release Date or the Distribution Date and to the extent described in the Form 10 (other than Indebtedness described in incurred pursuant to clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets) , and outstanding Refinancing Indebtedness incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 125 million or and (y) 1017.5% of Total AssetsEBITDA for the most recently ended Test Period at the time of incurrence; provided that such Indebtedness (other than Refinancing Indebtedness) exists at the date of such purchase, lease, construction, installation, repair, replacement or improvement or is created prior to or within 270 days of the completion thereof; provided, further that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding Indebtedness of the Issuer or the Restricted Subsidiaries;
(vi5) (A) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations Subsidiary with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practices, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement or indemnification obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other reimbursement-type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 2 contracts
Samples: Indenture (Arconic Rolled Products Corp), Indenture (Arconic Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Baytex will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness (including Acquired Indebtedness except to the extent that it qualifies as Permitted Indebtedness pursuant to clause (i) of the definition thereof), other than Permitted Indebtedness) , or issue any shares of Disqualified Stock; provided, however, except that the Company Baytex or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 greater than 2.5 to 1.00 determined on a 1.0. In making the foregoing calculation, pro forma basis effect will be given to:
(including a pro forma i) the incurrence of such Indebtedness and the application of the net proceeds therefrom)from the incurrence of Indebtedness, including to refinance other Indebtedness, since the first day of such four-quarter period as if the additional such Indebtedness had been was incurred or the Disqualified Stock had been issued, as the case may be, and the application of such proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) the incurrence, repayment or retirement of any Real Estate Financing Transactionother Indebtedness by Baytex or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;and
(iii) the incurrence acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any other company, entity, business or assets acquired or disposed of by Baytex or any Restricted Subsidiary, as the Company case may be, since the first day of Indebtedness represented by such four-quarter period, as if such acquisition or disposition (including the Notes issued on incurrence, assumption or liability for any such Acquired Indebtedness) occurred at the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses beginning of such four-quarter period. In making a computation under the foregoing clause (i) and or (iii)ii):
(A) interest on Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months);
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedbears, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than option of Baytex, a fixed or floating rate of interest, interest thereon will be computed by applying, at the remaining Weighted Average Life to Maturity option of Indebtedness being refunded Baytex, either the fixed or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtednessfloating rate; and
(xviC) the amount of any Indebtedness or Disqualified Stock under a revolving credit facility (including the Senior Secured Credit Facilities to the extent they constitute a revolving credit facility) will be computed based on the average daily balance of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of during such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionfour-quarter period.
Appears in 2 contracts
Samples: Trust Indenture (Baytex Energy Corp.), Trust Indenture (Baytex Energy Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur,” “Incurrence” and collectively, an "incurrence" of“Incurred” shall have a corresponding meaning) any Indebtedness (including Acquired Indebtedness) or Debt), and the Issuer will not issue any shares Disqualified Stock and will not permit any of Disqualified its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness or (including Acquired Debt), and the Issuer and the Restricted Subsidiaries may issue shares of Disqualified Stock Stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available Issuer’s Reference Period immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued, as the case may be, would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodReference Period.
(b) The foregoing limitations Section 4.2(a) will not apply toprohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Stock described in clause (11) below:
(i1) the incurrence Incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder the guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereofmaximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) up not to an exceed the greater of (a) $1,750 million and (b) the sum of $850.0 million and 30% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(2) the Incurrence by the Issuer and its Restricted Subsidiaries of the aggregate principal amount of $550 million outstanding at any one timeIndebtedness in existence on the Issue Date (other than Indebtedness under the Credit Agreement), until such amounts are repaid;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii3) the incurrence Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Notes and the Guarantees to be issued on the Issuance Issue Date;
(iv4) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries to finance of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purchase, lease purpose of financing all or any part of the purchase price or cost of construction or improvement of property (real or personal) property, plant or equipment (whether through used in the direct purchase business of assets the Issuer or the Capital Stock any of any Person owning such assets) its Restricted Subsidiaries, in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other Permitted Refinancing Indebtedness then outstanding and incurred Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does at any time outstanding, not to exceed the greater of (xa) $50 150.0 million or and (yb) 105% of Total AssetsConsolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(vi5) Indebtedness incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be Incurred under Section 4.2(a) or Section 4.2(b)(2), (3), (4), (10) or (14) or this Section 4.2(b)(5);
(6) the Incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(i) if the Issuer or any Guarantor is the obligor of such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to letters the Notes, in the case of credit issued the Issuer, or the guarantee of the Notes, in the case of a Guarantor; and
(ii) (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary, will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations or Indebtedness under Treasury Management Arrangements;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.2 or (b) Indebtedness Incurred by Joint Ventures, provided that such guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or the guarantees of the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(9) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including without limitation guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in respect each case other than an obligation for money borrowed) and replacements of workers' compensation claims any of the foregoing;
(10) the Incurrence by the Issuer or self-insuranceany of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(11) the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock to the Issuer or any of its Restricted Subsidiaries, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsas the case may be; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;that:
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which Equity Interests of a Restricted Subsidiary that results in any such Restricted Subsidiary ceasing to be Disqualified Stock being held, directly or indirectly, by a Person other than the Issuer or a Restricted Subsidiary Subsidiary; and
(ii) any sale or any other subsequent transfer of any such Indebtedness (except Disqualified Stock to a Person that is not either the Company Issuer or another a Restricted Subsidiary) shall , will be deemed, in each case case, to be an incurrence constitute issuance of such IndebtednessDisqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause;
(ix12) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred Incurrence in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness which serves under letters of credit Incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit;
(13) the Incurrence by the Issuer or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Issuer’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (13) and then outstanding does not exceed $25 million; and
(14) the Incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or restructure discharge any Indebtedness incurred as permitted under paragraph or Disqualified Stock issued pursuant to this clause (14), not to exceed the greater of (a) and clauses (iii) $150.0 million and (ivb) above5% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom).
(c) The Issuer will not Incur, or and will not permit any other Guarantor to Incur, any Indebtedness issued (including Permitted Debt) that is contractually subordinated in right of payment to so refund, refinance any other Indebtedness of the Issuer or restructure such Guarantor unless such Indebtedness including additional Indebtedness incurred is also contractually subordinated in right of payment to pay premiums the Notes and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturityapplicable guarantee of the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or any such Refinancing Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior lien basis.
(d) For purposes of determining compliance with this Section 4.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Section 4.2(b)(1) through (A14) has a Weighted Average Life above, or is entitled to Maturity at be Incurred pursuant to Section 4.2(a), the time Issuer will be permitted to classify such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity item of Indebtedness being refunded on the date of its Incurrence, or refinancedlater reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.2. Indebtedness under Credit Facilities outstanding on the Issue Date under this Indenture will initially be deemed to have been Incurred on such date in reliance on the exception provided by clause (B1) of the definition of Permitted Debt.
(e) The accrual of interest, the accretion or amortization of original issue discount or deferred financing costs, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or temporary equity as Indebtedness due to the application of or a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares or units of the same class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.2; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Issuer as accrued to the extent required by the definition of such Refinancing term. Notwithstanding any other provision of this Section 4.2, the maximum amount of Indebtedness refinances Indebtedness subordinated that the Issuer or pari passu any Restricted Subsidiary may Incur pursuant to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) this Section 4.2 shall not include be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(xf) The amount of any Indebtedness outstanding as of a Subsidiary that refinances Indebtedness any date will be:
(i) the accreted value of the Company Indebtedness, in the case of any Indebtedness issued with original issue discount or deferred financing costs;
(yii) Indebtedness the principal amount of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing Indebtedness, in the case of any Senior other Indebtedness; and
(xviiii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of (a) the Fair Market Value of such assets at the date of determination; and (b) the amount of the Indebtedness of the other Person.
(g) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or Disqualified Stock first committed, in the case of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenturerevolving credit debt; provided that if such Indebtedness or Disqualified Stock is not incurred Incurred to refinance other Indebtedness denominated in contemplation a foreign currency, and such refinancing 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 acquisition or merger; and provided further that after giving effect refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such acquisition, either refinancing Indebtedness does not exceed (Ai) the Company would be permitted to incur at least $1.00 principal amount of additional such Indebtedness under paragraph being refinanced plus (a) or (Bii) the Fixed Charge Coverage Ratio aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is greater than immediately prior to denominated that is in effect on the date of such acquisitionrefinancing.
Appears in 2 contracts
Samples: Indenture (Hess Midstream LP), Indenture (Hess Midstream LP)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Guarantor will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of) after the date of the Indenture any Indebtedness (including Acquired IndebtednessDebt) or and neither the Company nor the Guarantor will issue any Disqualified Stock and the Guarantor will not permit any of its Restricted Subsidiaries (other than the Company) to issue any shares of Disqualified Stockpreferred stock; provided, however, that the Company and the Guarantor may incur Indebtedness or (including Acquired Debt) and the Company and the Guarantor may issue shares of Disqualified Stock if (i) no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof and (ii) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Guarantor's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least (x) 1.50 to 1 if such incurrence or issuance occurs on or before April 30, 1999, (y) 1.75 to 1.00 1 if such incurrence or issuance occurs after April 30, 1999 and on or before April 30, 2000 and (z) 2.00 to 1 if such incurrence or issuance occurs after April 30, 2000, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. Indebtedness consisting of reimbursement obligations in respect of a letter of credit will be deemed to be incurred when the letter of credit is first issued. Neither the Company nor the Guarantor will permit any of their respective Unrestricted Subsidiaries to incur any Indebtedness other than Non-Recourse Debt. The foregoing provisions will not apply to:
(i) the incurrence by the Company and the Guarantor of Senior Debt under the Company Credit Agreement in an aggregate principal amount at any time outstanding not to exceed an amount equal to $1.0 billion less the aggregate amount of all mandatory payments applied to repay loans (other than revolving credit loans) outstanding thereunder or permanently reduce the revolving credit commitments thereunder; provided that the Company and the Guarantor may incur Senior Debt in an aggregate principal amount at any time outstanding not to exceed $300 million under the revolving credit facility under the Company Credit Agreement;
(ii) the incurrence by the Company and the Guarantor of Indebtedness represented by the Securities and the Guarantee;
(iii) Existing Indebtedness;
(iv) the incurrence by the Guarantor or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by the Indenture to be incurred (including, without limitation, Existing Indebtedness);
(v) the incurrence by the Guarantor or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Guarantor and any of its Restricted Subsidiaries; provided that upon either (a) the transfer or other disposition by the Guarantor or a Restricted Subsidiary of any Indebtedness so permitted under this clause (v) to a Person other than the Guarantor or a Restricted Subsidiary or (b) the issuance, sale, transfer or other disposition of Equity Interests (including by consolidation or merger) in a Restricted Subsidiary to a Person other than the Guarantor or a Restricted Subsidiary which results in such Restricted Subsidiary ceasing to be a Restricted Subsidiary, the provisions of this clause (v) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be;
(vi) the incurrence by the Guarantor or any of its Restricted Subsidiaries of Hedging Obligations or Guarantees thereof, provided that such Hedging Obligations are incurred for the purpose of fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by the Indenture to be outstanding or any receivable or liability, the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates;
(vii) the incurrence by the Guarantor or any of its Restricted Subsidiaries of Indebtedness represented by performance bonds, standby letters of credit or appeal bonds, in each case to the extent incurred in the ordinary course of business of the Guarantor or such Restricted Subsidiary;
(viii) the incurrence by any Restricted Subsidiary (other than the Company) of Indebtedness, the aggregate principal amount of which, together with all other Indebtedness of the Guarantor's Restricted Subsidiaries (other than the Company) at the time outstanding (excluding Existing Indebtedness until repaid or refinanced), does not exceed the greater of (1) 10% of the Guarantor's Stockholders' Equity as of the date of incurrence or (2) $10 million; provided that, in the case of clause (1) only, the Fixed Charge Coverage Ratio for the Guarantor's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness (including Acquired Subsidiary Debt) is incurred would have been at least (x) 1.50 to 1 if such incurrence occurs on or before April 30, 1999, (y) 1.75 to 1 if such incurrence occurs after April 30, 1999 and on or before April 30, 2000 and (z) 2.00 to 1 if such incurrence occurs after April 30, 2000, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional such Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.; provided further, that solely for the purpose of determining whether the aggregate principal amount of Indebtedness of the Guarantor's Restricted Subsidiaries (other than the Company) at any time outstanding exceeds 10% of the Guarantor's Stockholders' Equity, Acquired Subsidiary Debt shall be excluded; and
(b) The foregoing limitations will not apply to:
(iix) the incurrence by the Company and the Guarantor of Indebtedness under the Senior Credit Facility and the issuance and creation (in addition to Indebtedness permitted by any other clause of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsparagraph) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then at any time outstanding and incurred pursuant not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition25 million.
Appears in 1 contract
Samples: Indenture (Vencor Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of") any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 (determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) ). The foregoing limitations will not apply to:
: (ia) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior New Credit Facility and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 650 million outstanding at any one time;
; (ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iiib) the incurrence by the Company Issuers of Indebtedness represented by the Notes issued Securities; (c) Indebtedness of the Company and its Restricted Subsidiaries existing on the Issuance Date;
(iv) Existing Indebtedness Issue Date (other than Indebtedness described in clauses (ia) and (iiib));
, including the Senior Subordinated Notes and the Company's guarantee thereof (vand any future guarantees thereof); (d) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (vd) (together with any and including all Refinancing Indebtedness with respect thereto(as defined below) incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (d), does not exceed the greater of (x) $50 million or (y) 1015% of Total Assets;
Assets at the time of the respective incurrence; (vie) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viif) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiig) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is shall be subordinated in right of payment to the NotesSecurities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.which
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incurINCUR" and collectively, an "incurrence" ofINCURRENCE") any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been (i) if such incurrence occurs on or prior to April 15, 2003, at least 1.75 to 1.00 1.00; and (ii) if such incurrence occurs after April 15, 2003, at least 2.00 to 1.00, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will Section 1010(a) shall not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 650.0 million outstanding at any one time;; 100
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 50.0 million or (y) 1015% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; providedPROVIDED, howeverHOWEVER, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; providedPROVIDED, howeverHOWEVER, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes 101 in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided PROVIDED that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further PROVIDED FURTHER that any subsequent issuance or transfer of any Capital Stock or any other event which results will result in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; PROVIDED that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided PROVIDED that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further PROVIDED FURTHER that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such 102 Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 150.0 million at any one time outstanding; providedPROVIDED, howeverHOWEVER, that Indebtedness of Foreign Subsidiariesa Restricted Subsidiary organized under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, which when aggregated with the principal amount of all other Indebtedness of Foreign such Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 60.0 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 10141014 hereof) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) of this Section 1010 and clauses (ii), (iii), (iv) and (ivxii) aboveor clause (xvi) of this paragraph (b), or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums premiums, expenses and fees in connection therewith (the "Refinancing IndebtednessREFINANCING INDEBTEDNESS") prior to its respective maturity; providedPROVIDED, howeverHOWEVER, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or Indebtedness of a non- Guarantor that refinances Indebtedness of a Guarantor or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further PROVIDED FURTHER that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided PROVIDED that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further PROVIDED FURTHER that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (athe provisions of Section 1010(a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionacquisition or merger; and
(xvii) guarantees by the Company or its Restricted Subsidiaries of the obligations of joint ventures of the Company or its Restricted Subsidiaries; PROVIDED that the maximum aggregate amount of all such guaranteed obligations shall at not time exceed $25 million. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvii) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to paragraph (a) of this Section 1010. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 1010.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Borrower shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise, (collectively, "incur" “Incur” and collectively, an "incurrence" of“Incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Borrower shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Company Borrower may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, if the Fixed Charge Coverage Borrower’s Debt to Adjusted EBITDA Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 be less than or equal to 1.00 6.75 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be Incurred pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors of the Loans shall not exceed $250.0 million at any one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) the incurrence by the Company Incurrence of Indebtedness under Credit Facilities by the Senior Credit Facility Borrower or any of the Restricted Subsidiaries and the issuance and creation of letters of credit and bankers' ’ acceptances thereunder (with letters of credit and bankers' ’ acceptances being deemed to have a principal amount equal to the face amount thereof) ), up to an aggregate principal amount of $550 3,210.0 million outstanding at any one time; provided, however, that the aggregate amount of Indebtedness Incurred by Restricted Subsidiaries (other than Guarantors) pursuant to this clause (1) may not exceed $500.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii2) the incurrence Incurrence by the Company Borrower and any Guarantor of Indebtedness represented by the Notes issued on Loans, any Notes, and Exchange Notes, or Acquisition Notes, and any other Indebtedness Incurred to finance any of the Issuance DateChange of Control Offers with respect to Existing Indebtedness in connection with the Acquisition (and, in any case, any Guarantees thereof);
(iv3) Existing Indebtedness (other than Indebtedness described in clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) incurred Obligations and Indebtedness related to Sale and Lease-Back Transactions), Disqualified Stock and preferred stock Incurred by the Company Borrower or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) , in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred Incurred pursuant to this clause (v4) (together with any and including all Refinancing Indebtedness with respect theretoIncurred to refund, refinance or replace any other Indebtedness, Disqualified Stock and preferred stock Incurred pursuant to this clause (4), does not exceed the greater of (xi) $50 250 million or and (yii) 104.5% of Total Assets;.
(vi5) Indebtedness incurred Incurred by the Company Borrower or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims or self-insuranceclaims, or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrenceIncurrence;
(vii6) Indebtedness arising from agreements of the Company Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that that
(A) such Indebtedness is not reflected on the balance sheet of the Company Borrower or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (A6)(A)) and and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash non-cash proceeds (the fair market value Fair Market Value of such noncash non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Borrower and its the Restricted Subsidiaries in connection with such disposition;
(viii7) Indebtedness (including Indebtedness related to Sale and Lease-Back Transactions) of the Company Borrower to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is made pursuant to an intercompany note and not a Guarantor is subordinated in right of payment to the NotesLoans; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence Incurrence of such Indebtedness;
(ix8) Indebtedness (including Indebtedness related to Sale and Lease-Back Transactions) Indebtedness of a Restricted Subsidiary to the Company Borrower or another Restricted Subsidiary; provided that that:
(A) any such Indebtedness is made pursuant to an intercompany note and and
(B) if a Guarantor incurs Incurs such Indebtedness from to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence Incurrence of such Indebtedness;
(x9) shares of preferred stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Borrower or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock;
(10) Hedging Obligations that are incurred in the ordinary course of business (Aexcluding Hedging Obligations entered into for speculative purposes) for the purpose of fixing limiting interest rate risk or hedging interest exchange rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect Incurred pursuant to any currency exchangesthis Section 10.1;
(xi11) obligations in respect of performance performance, bid, appeal and surety bonds and completion guarantees provided by the Company Borrower or any Restricted Subsidiary in the ordinary course of business;
(xii12) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness Indebtedness, Disqualified Stock and preferred stock of the Company and Borrower or any of its Foreign Subsidiaries Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred Incurred pursuant to this clause (xiii12), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness outstanding exceed the sum of Foreign (i) $250.0 million and (ii) 100% of the net cash proceeds received by the Borrower since immediately after the Closing Date from the issue or sale of Equity Interests of the Borrower or cash contributed to the capital of the Borrower (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to the Borrower or any of its Subsidiaries, which when aggregated ) as determined in accordance with the principal amount definition of all the term “Cumulative Credit” to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Indebtedness investments, payments or exchanges pursuant to Section 10.2(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of Foreign Subsidiaries then outstanding and incurred the definition thereof), (it being understood that any Indebtedness, Disqualified Stock or preferred stock Incurred pursuant to this clause (xiii12) shall cease to be deemed Incurred or outstanding for purposes of this clause (12) but shall be deemed Incurred for the purposes of Section 10.1(a) from and after the first date on which the Borrower or such Restricted Subsidiary could have Incurred such Indebtedness, Disqualified Stock or preferred stock under Section 10.1(a) without reliance on this clause (12), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding);
(A13) any guarantee the Incurrence by the Company of Indebtedness Borrower or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Indebtedness, Disqualified Stock or any of its Restricted Subsidiaries of Indebtedness preferred stock which serves to refundrefund or refinance any Indebtedness, refinance Disqualified Stock or restructure any Indebtedness incurred preferred stock Incurred as permitted under paragraph (aSection 10.1(a) and clauses (iii2) and (iv3) above, this clause (13) and clause (14) below or any Indebtedness Indebtedness, Disqualified Stock or preferred stock issued to so refundrefund or refinance such Indebtedness, refinance Disqualified Stock or restructure such Indebtedness preferred stock including additional Indebtedness incurred Indebtedness, Disqualified Stock or preferred stock Incurred to pay premiums and fees in connection therewith (the "“Refinancing Indebtedness"”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness Indebtedness
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness the Indebtedness, Disqualified Stock or preferred stock being refunded or refinanced, ,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the NotesLoans or any Guarantee of the Loans, such Refinancing Indebtedness is subordinated or pari passu to the Notes Loans or such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded and or (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively and
(C) shall not include (xi) Indebtedness Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company Borrower, (ii) Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of a Guarantor or (yiii) Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company Borrower or a Restricted Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or preferred stock of an Unrestricted Subsidiary; and provided further that subclauses subclause (A) and (B) above of this clause (xv13) will shall not apply to any refunding or refinancing of any Indebtedness outstanding under the Senior Indebtedness; andCredit Facilities;
(xvi14) Indebtedness or Indebtedness, Disqualified Stock or preferred stock of Persons that are acquired by the Company Borrower or any of its Restricted Subsidiaries Subsidiary or merged into the Borrower or a Restricted Subsidiary in accordance with the terms of this IndentureAgreement; provided that such Indebtedness or Indebtedness, Disqualified Stock or preferred stock is not incurred Incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisitionacquisition or merger, either either
(A) the Company Borrower would be permitted to incur Incur at least $1.00 of additional Indebtedness under paragraph (a) or pursuant to the Debt to Adjusted EBITDA Ratio test set forth in Section 10.1(a), or
(B) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio is greater less than immediately prior to such acquisition.acquisition or merger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within two Business Days of its Incurrence;
(16) Indebtedness of the Borrower or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit; and
(17) (A) any guarantee by the Borrower or a Guarantor of Indebtedness or other obligations of any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by such Restricted Subsidiary is permitted under the terms of this Agreement, or
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Holdings will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and Holdings will not issue any shares of Disqualified StockStock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Company Holdings may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, if the Fixed Charge Coverage Holdings’ Debt to Consolidated EBITDA Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 be less than or equal to 1.00 6.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) . The foregoing limitations will not apply to:to (“Permitted Debt”):
(ia) the incurrence by the Company of Indebtedness under Credit Facilities by Holdings or any of the Senior Credit Facility Restricted Subsidiaries and the issuance and creation of letters of credit and bankers' ’ acceptances thereunder (with letters of credit and bankers' ’ acceptances being deemed to have a principal amount equal to the face amount thereof) ), up to an aggregate principal amount of $550 US$2,550.0 million outstanding at any one time;
, less the aggregate of all principal prepayments made in respect of the Credit Facilities pursuant to clause (ii1) any Real Estate Financing Transactionof the second paragraph of Section 1018; provided, however, provided that the amount of Indebtedness outstanding available under clause (i) above and this clause (iia) shall not in reduce on the aggregate exceed $550 million at any time outstanding;
(iii) date that is the incurrence twelve month anniversary of the Acquisition Closing Date by the Company amount, if any, of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 US$150.0 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing Delayed Draw Senior Secured Term Loan B Facility which is undrawn as of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
date (vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) but only to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.undrawn amount);
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively, an "incurrence" of) Incur any Indebtedness (including Acquired Indebtedness) or and the Company shall not issue any shares of Disqualified StockStock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will shall not apply to:
(i) the incurrence existence of Indebtedness under Credit Facilities on the Closing Date together with the Incurrence by the Company of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 550.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence Incurrence by the Company of Indebtedness represented by the Notes Securities issued on the Issuance Closing Date;
(iviii) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred Incurred pursuant to this clause (viv) (together with and including all Refinancing indebtedness Incurred to refund, refinance or replace any Refinancing other Indebtedness with respect theretoIncurred pursuant to this Section 4.03(b)(iv), does not exceed the greater of (x) $50 million or (y) 1020% of Total Assets;
(viv) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrenceIncurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (Aa) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (Aa)) and (Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the NotesSecurities; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence Incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of") any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 450 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 million or (y) 1020% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ixviii) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(xix) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesoutstanding;
(xix) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xiixi) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiiixii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiiixii), does not exceed $150 150.0 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the aggregate principal amount of all other such Indebtedness of Foreign which may be incurred by Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 100.0 million (or the equivalent thereof in any other currency) at any one time outstanding; (it being understood that any Indebtedness incurred under this clause (xii) shall cease to be deemed incurred or outstanding for purposes of this clause (xii) but shall be deemed to be incurred for purposes of paragraph (a) of this Section 1010 from and after the first date on which the Company could have incurred such Indebtedness under paragraph (a) of this Section 1010 without reliance upon this clause (xii));
(xiii) (A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xvxiv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iiiii) and (iviii) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xvxiv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvixv) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition; and
(xvi) Contingent Obligations in the form of guarantees, whether by operation of law or otherwise, of Indebtedness of joint ventures in existence on the Issuance Date to which the Company or its Restricted Subsidiaries is a party. For purposes of determining compliance with this Section, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to paragraph (a) of this Section 1010 except as otherwise set forth in clause (xii). Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Each of Sweetheart Holdings and the Issuer will not, and will not permit any of its Restricted their Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness or issue any Disqualified Stock, and Sweetheart Holdings will not permit any of its Subsidiaries (including Acquired Indebtednessthe Issuer) to issue any preferred stock (except for preferred stock issued to the Issuer, Sweetheart Holdings or any shares Subsidiary of Disqualified Stock; providedthe Issuer or Sweetheart Holdings), howeverexcept that Sweetheart Holdings, the Issuer and any of their Subsidiaries that the Company is a Guarantor may incur Indebtedness or issue shares of Disqualified Stock if the if, (i) after giving effect thereto, Sweetheart Holding's Pro Forma Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred shall be greater than 2.0 to 1; and (ii) no Default or Event of such incurrence Default shall have occurred and be continuing (which has not been waived) or would have been at least 1.75 occur as a consequence thereof; provided that no Guarantee may be incurred pursuant to 1.00 determined on a pro forma basis (including a pro forma application the provisions of this paragraph, unless the net proceeds therefrom), as if the additional guaranteed Indebtedness had been is also incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) pursuant to this paragraph. The foregoing limitations will not apply to:
(i) to the incurrence of (a) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of Indebtedness their Subsidiaries that is a Guarantor under or in respect of the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have Agreement in a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant incurrence not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or 65% of inventory plus 85% of accounts receivables of Sweetheart Holdings and its Subsidiaries (in each case as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, accounts receivable owned by a Receivables Subsidiary and inventory and accounts receivable of Lily Canada), and (y) 10% $215.0 million, reduced, in the case of Total Assets;
clause (viy), by the amount of the proceeds of any Asset Sales (including a Designated Asset Sale and Asset Sales to a Receivables Subsidiary) applied to repay outstanding Indebtedness under the Credit Agreement; (b) Indebtedness in respect of the Securities and Existing Indebtedness; (c) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of its Restricted their Subsidiaries constituting reimbursement obligations with respect to letters of credit that is a Guarantor and issued in exchange for or the ordinary course proceeds of businesswhich are used to extend, including without limitation letters refinance, renew, replace, substitute or refund Indebtedness referred to in the immediately preceding paragraph or clause (b) above, and Indebtedness of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsSubsidiaries contemplated by clause (k) below (the "Refinancing Indebtedness"); provided, however, that upon (i) the drawing principal amount of such letters Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded (plus the amount of reasonable expenses incurred thereunder) (the "Refinanced Indebtedness"), (ii) the Refinancing Indebtedness shall rank pari passu with or junior to the Refinanced Indebtedness in right of payment and such Refinancing Indebtedness shall not permit payment prior to the stated maturity thereof earlier or in circumstances other than the Refinanced Indebtedness and (iii) the Weighted Average Life to Maturity of such Refinancing Indebtedness shall be no shorter than the Weighted Average Life to Maturity of the Refinanced Indebtedness; and provided, further, that in no event may Indebtedness of the Issuer or Sweetheart Holdings that is pari passu with, or subordinated in right of payment to, the Securities be exchanged, refinanced or refunded by means of Indebtedness of any Subsidiary of Sweetheart Holdings (other than the Issuer) pursuant to this clause (c); (d) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries in connection with any Hedging Obligations, performance bonds, letter of credit obligations and bank overdrafts incurred in the ordinary course of business or relating to (as determined in good faith by the incurrence Board of Directors of Sweetheart Holdings) or required by the terms of any Indebtedness permitted to be incurred pursuant to this Section 4.09; (e) additional Indebtedness of the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor (which Indebtedness may, but need not, be incurred under the Credit Agreement), capital lease obligations and Purchase Money Obligations, in an aggregate principal amount not to exceed $25.0 million at any one time outstanding, reduced by the principal amount of any such Indebtedness, Indebtedness repaid with Net Proceeds of Asset Sales (other than Purchase Money Obligations repaid with the Net Proceeds of Asset Sales of the assets securing such obligations are reimbursed within 30 days following such drawing or incurrence;
Obligations) to the extent no reduction is made pursuant to clause (viia) above; (f) Indebtedness of Lily Canada incurred under the Lily Canada Loan Agreement not to exceed the greater of (1) 65% of inventory plus 85% of accounts receivables of Lily Canada and (2) Cn. $30.0 million at any time outstanding, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Lily Canada and its assets); (g) Indebtedness of Global in an amount not to exceed 65% of inventory plus 85% of accounts receivables of Global, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Global and its assets); (h) Indebtedness between or among Sweetheart Holdings, the Issuer and their Subsidiaries; (i) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries and arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any Obligations of Sweetheart Holdings, the Issuer or any of their Subsidiaries pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Sweetheart Holdings or the Issuer, other than guarantees Guarantees of Indebtedness incurred by any Person person acquiring all or any portion of such business, assets or a Subsidiary of Sweetheart Holdings or the Issuer for the purpose of financing such acquisition, in a principal amount not to exceed 25% of the gross proceeds (with proceeds other than cash or Cash Equivalents being valued at the fair market value thereof as determined by the Board of Directors of Sweetheart Holdings in good faith) actually received by Sweetheart Holdings, the Issuer or any of their Subsidiaries in connection with such dispositions, (j) Indebtedness of Sweetheart Holdings or the Issuer in an aggregate principal amount not to exceed $4.0 million at any one time outstanding incurred in connection with the purchase, redemption, acquisition, cancellation or other retirement for value of shares of capital stock of Sweetheart Holdings, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any stock option plan, upon death, disability, retirement, termination of employment or pursuant to the terms of such stock option plan or any other agreement under which such stares of capital stock, options, related rights or similar securities were issued; provided, however, provided that (A) such Indebtedness is not reflected on the balance sheet of the Company indebtedness, by its terms or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness terms of the Company any agreement or instrument pursuant to a Restricted Subsidiary; provided that any which such Indebtedness is issued, is expressly made pursuant subordinate in right of payment to an intercompany note and is the Securities at least to the extent that the Xxxxx Notes are subordinated in right of payment to the Notes; provided further that any subsequent issuance Securities, (B) such Indebtedness, by its terms or transfer by the terms of any Capital Stock agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by the Issuer or Sweetheart Holdings at any time prior to one year after the stated maturity of the Securities and (C) the scheduled maturity of all principal of such Indebtedness is at least one year after the stated maturity of the Securities; (k) Acquired Indebtedness in an aggregate principal amount not to exceed $25.0 million at any one time outstanding (reduced by the amount of Acquired Indebtedness repaid with Net Proceeds of Asset Sales other than Asset Sales of any Subsidiary subject to such Acquired Indebtedness) that is without recourse to Sweetheart Holdings, the Issuer or any of their Subsidiaries or any of their respective assets (other event which results in than the Subsidiary acquired subject to such Acquired Indebtedness and its assets), and is not guaranteed by any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiaryperson; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment after giving pro forma effect to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedincurrence thereof, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to Sweetheart Holdings could incur at least $1.00 of additional Indebtedness under the first paragraph (a) or of this Section 4.09 and (B) that any Refinancing Indebtedness with respect thereto may not be incurred by any person other than the Fixed Charge Coverage Ratio Subsidiary that is greater the obligor on such Acquired Indebtedness; (l) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer, Sweetheart Holdings or any Subsidiary of either or any of their respective assets (other than immediately prior such Receivables Subsidiary and its assets), and is not guaranteed by any such person and (m) if and to the extent that the Issuer, Sweetheart Holdings and any of their Subsidiaries that are Guarantors are not then parties to any Credit Agreement, Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor under or in respect of a working capital facility in a principal amount outstanding, after giving effect to such acquisitionincurrence, not to exceed the maximum Indebtedness that could then be incurred in accordance with clause (a)(x) above. Notwithstanding any other provision of this Section 4.09, a Guarantee of Indebtedness permitted by the terms of this Indenture at the time such Indebtedness was incurred will not constitute a separate incurrence of Indebtedness.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company Issuer and its the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction1.00; provided, howeverfurther, that the amount of Indebtedness outstanding (including Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any amounts incurred under clause (i14)(x) above and this clause (iiof Section 1011(b) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does that are not Guarantors shall not exceed the greater of (x) $50 35.0 million or and (y) 101.50% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million Assets at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (Engility Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately Applicable Measurement Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without being treated as an incurrence of Indebtedness; provided further, however, that the full amount of the Designated Revolving Commitments shall be treated as outstanding Indebtedness (whether or not outstanding) for each subsequent determination of any ratio hereunder until such Designated Revolving Commitments are no longer so designated as such) further compliance with this proviso) of the Issuer and the Restricted Subsidiaries would be at least 2.00 to 1.00; provided further, however, that the amount of Indebtedness, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any amounts incurred under Section 1011(b)(14)(x) by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $25.0 million and (y) 1.50% of Consolidated Total Assets at any one time outstanding (with such incurrence pursuant to this paragraph being tested solely at the time of incurrence and without regard to subsequent changes in Consolidated Total Assets).
(b) The foregoing limitations shall not apply to:
(a) Indebtedness incurred by the Issuer or any Guarantor pursuant to any Term Loan Facility or any other Credit Facility; provided, however, that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (1)(a) and then outstanding does not exceed $685 million, less the aggregate sum of all principal payments actually made from time to time after the Effective Date with respect to such Indebtedness (other than principal payments made from any permitted Refinancings thereof), plus an aggregate additional principal amount of Indebtedness of the type referred to in clause (a) of the definition of Consolidated Secured Net Debt outstanding such that at any one time would have been at least 1.75 not cause the Consolidated Secured Debt Ratio of the Issuer to exceed 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.;
(b) The foregoing limitations will not apply to:
(i) the incurrence Indebtedness incurred by the Company of Indebtedness under the Senior Issuer or any Guarantor pursuant to any ABL Revolving Credit Facility and the issuance and creation of letters of or any other Credit Facility that is a revolving credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transactionfacility; provided, however, that that, immediately after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness outstanding incurred under clause (i) above and this clause (ii1)(b) shall and then outstanding does not in exceed the aggregate exceed greater of (A) $550 110.0 million at any time outstandingless the sum of all principal payments with respect to such Indebtedness pursuant to Section 1017(b) and (B) the sum of (x) 40.00% of the book value of the inventory of the Issuer and its Restricted Subsidiaries and (y) 75.00% of the book value of the accounts receivable of the Issuer and its Restricted Subsidiaries;
(iii2) the incurrence by the Company of Indebtedness represented by the Notes (including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto) and exchange notes issued on the Issuance Datein respect of any Notes and any Guarantee thereof;
(iv3) Existing Indebtedness (other than Indebtedness described in clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred or issued by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets, and all Refinancing Indebtedness (having the meaning set forth in clause (13) below) incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 45.0 million or and (y) 102.50% of Consolidated Total Assets (with such incurrence pursuant to this clause being tested solely at the time of incurrence and without regard to subsequent changes in Consolidated Total Assets); provided, however, that such Indebtedness exists at the date of such purchase, lease, construction, installation, repair, replacement or improvement or is created within 270 days of the completion thereof; provided further, however, that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding Indebtedness of the Issuer or the Restricted Subsidiaries;
(vi5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type or indemnification obligations regarding workers' ’ compensation claims; provided, howeverperformance or surety bonds, that upon the drawing of such letters of credit health, disability or the incurrence of such Indebtednessother employee benefits or property, such obligations are reimbursed within 30 days following such drawing casualty or incurrenceliability insurance or self-insurance;
(vii6) Indebtedness arising from agreements of the Company Issuer or a its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) if such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiary Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A6)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received is paid after becoming due and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such dispositionpayable;
(viii7) Indebtedness (i) of the Company Issuer to a Restricted Subsidiary or (ii) of a Restricted Subsidiary owing to the Issuer or a Restricted Subsidiary; provided provided, however, that any if such Indebtedness is made pursuant owing to an intercompany note and a Restricted Subsidiary that is not the Issuer or a Guarantor, such Indebtedness is subordinated in right of payment to the Notes; provided further further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary to which such indebtedness is owed ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(8) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not exceeding the greater of (x) $75.0 million and (y) 4.50% of Consolidated Total Assets (with such incurrence or issuance pursuant to this clause being tested solely at the time of incurrence or issuance and without regard to subsequent changes in Consolidated Total Assets);
(9) shares of preferred stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness shares of preferred stock (except to the Company Issuer or another a Restricted Subsidiary) shall be deemed, deemed in each case to be an incurrence issuance of such Indebtednessshares of preferred stock not permitted by this clause;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x10) Hedging Obligations that are incurred in the ordinary course of business (Aexcluding Hedging Obligations entered into for speculative purposes) for the purpose of fixing or hedging limiting interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency risk, exchange rate risk with respect to any currency exchangesor commodity pricing risk;
(xi11) obligations in respect of performance self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(xii12) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company and Issuer or any of its Foreign Subsidiaries Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred or issued, as applicable, pursuant to this clause (xiii12), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness outstanding exceed the greater of Foreign Subsidiaries, which when aggregated (x) $50.0 million and (y) 3.00% of Consolidated Total Assets (with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred such incurrence or issuance pursuant to this clause (xiiibeing tested solely at the time of incurrence), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries of Indebtedness Indebtedness, Disqualified Stock or preferred stock which serves to refundRefinance within 90 days following the date of the incurrence or issuance thereof any Indebtedness, refinance Disqualified Stock or restructure any Indebtedness preferred stock incurred as permitted under paragraph (aSection 1011(a) and clauses (iii) 1)(a), (2), (3), (4), (8) and (iv12) above, this clause (13) and clause (14) below or any Indebtedness Indebtedness, Disqualified Stock or preferred stock issued to so refundRefinance such Indebtedness, refinance Disqualified Stock or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith preferred stock (the "“Refinancing Indebtedness"”) prior to its respective maturity; provided, however, that that:
(A) such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness the Indebtedness, Disqualified Stock or preferred stock being refunded or refinanced, Refinanced;
(B) to the extent such Refinancing Indebtedness refinances Refinances (i) Indebtedness subordinated to the Notes or pari passu to any Guarantee of the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes or such Guarantee at least to the same extent as the Indebtedness being refinanced Refinanced or refunded and (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively;
(C) such Refinancing Indebtedness shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of the Issuer that is not a Guarantor that Refinances Indebtedness, Disqualified Stock or preferred stock of the Issuer or a Guarantor;
(D) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness shall not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, Disqualified Stock or preferred stock being Refinanced except by an amount no greater than accrued and unpaid interest on, the Indebtedness, the amount of, plus any accrued and unpaid dividends on, the preferred stock or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so extended, replaced, refunded, refinanced, renewed or defeased (such Indebtedness, Disqualified Stock or preferred stock, the “Refinanced Debt”), plus the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such Refinanced Debt and any defeasance costs and any fees and expenses (including customary original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, preferred stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such Refinanced Debt; and
(E) in the case of any Refinancing Indebtedness incurred to refinance Indebtedness outstanding under the last proviso in Section 1011(a), clause (1)(a), (4), (8), or (12) above, such Refinancing Indebtedness shall be deemed to have been incurred and to be outstanding under such proviso or clause (1)(a), (4), (8), or (12), as applicable, and not this clause (13) for purposes of determining amounts outstanding and availability under such proviso or clause (1)(a), (4), (8), or (12);
(14) Indebtedness, Disqualified Stock or preferred stock of (x) Indebtedness the Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or other assets or that is assumed by the Issuer or any Restricted Subsidiary in connection with (in aggregate principal amount not to exceed the purchase price of a Subsidiary that refinances Indebtedness such acquisition or purchase, or in the case of any such assumption, the Company aggregate obligations assumed) or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged into or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that such Indebtedness or Disqualified Stock is not incurred provided, however, in contemplation of such acquisition or merger; and provided further each case, that after giving effect to such acquisition, either merger or consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a), or
(B) the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries is equal to or greater than (i) immediately prior to such acquisition., merger or consolidation or (ii) as of the Effective Date, or
(C) the Consolidated Total Debt Ratio of the Issuer and the Restricted Subsidiaries is equal to or less than (i) immediately prior to such acquisition, merger or consolidation or (ii) as of the Effective Date;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(16) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as, in the case of a guarantee by a Restricted Subsidiary that is not a Guarantor, such Indebtedness could have been incurred directly by the Restricted Subsidiary providing such guarantee, or
Appears in 1 contract
Samples: Indenture (Entegris Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness (including Acquired Indebtedness) ), other than Permitted Indebtedness, or issue any shares of Disqualified Stock; provided, howeverother than Disqualified Stock issued in connection with the Reorganization, except that the Company or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 greater than 2.5 to 1.00 determined on a 1.0. In making the foregoing calculation, pro forma basis effect will be given to: (including a pro forma i) the incurrence of such Indebtedness and the application of the net proceeds therefrom)from the incurrence of Indebtedness, including to refinance other Indebtedness, since the first day 77 of such four-quarter period as if the additional such Indebtedness had been was incurred or the Disqualified Stock had been issued, as the case may be, and the application of such proceeds had occurred at the beginning of such four-quarter period.
, (b) The foregoing limitations will not apply to:
(iii) the incurrence incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness under was incurred, repaid or retired at the Senior Credit Facility beginning of such four-quarter period, and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence acquisition (whether by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease merger or improvement of property (real or personalotherwise) or equipment disposition (whether through the direct purchase of assets by sale, merger or the Capital Stock otherwise) of any Person owning such assets) in an aggregate principal amount whichother company, when aggregated with the principal amount entity, business or assets acquired or disposed of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in Subsidiary, as the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect case may be, since the first day of such Guarantor's Guarantee;
four-quarter period, as if such acquisition or disposition (xiiiincluding the incurrence, assumption or liability for any such Acquired Indebtedness) Indebtedness occurred at the beginning of such four-quarter period. In making a computation under the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this foregoing clause (xiiii) or (ii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) interest on Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the dated of computation had been the applicable rate for the entire period (taking into account any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of Hedging Obligations applicable to such Indebtedness incurred by if such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of Hedging Obligations have a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity remaining term at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity date of Indebtedness being refunded or refinanceddetermination in excess of 12 months), (B) to if such Indebtedness bears, at the extent such Refinancing Indebtedness refinances Indebtedness subordinated option of the Company, a fixed or pari passu to floating rate of interest, interest thereon will be computed by applying, at the Notesoption of the Company, such Refinancing Indebtedness is subordinated either the fixed or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded floating rate and (C) shall not include the amount of any Indebtedness under a revolving credit facility (x) Indebtedness of including the Senior Credit Facilities to the extent they constitute a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xvrevolving credit facility) will not apply to any refunding or refinancing be computed based on the average daily balance of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of during such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionfour-quarter period.
Appears in 1 contract
Samples: Indenture (Baytex Energy LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if (any Indebtedness or Disqualified Stock incurred pursuant to this paragraph, “Ratio Indebtedness”) if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company Issuer and its the Restricted Subsidiaries would be at least 2.00 to 1.00; provided, further, that the amount of Indebtedness and Disqualified Stock that may be incurred pursuant to the foregoing, together with (i) any amounts incurred and outstanding pursuant to Section 4.07(b)(14)(x) and (ii) any amounts incurred and outstanding pursuant to Section 4.07(b)(13) (but solely to the extent such Refinancing Indebtedness is in respect of (x) Ratio Indebtedness or (y) Indebtedness incurred pursuant to Section 4.07(b)(14)(x)) by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $200 million and (y) 25.0% of EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been Test Period at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) Indebtedness incurred pursuant to Credit Facilities by the Issuer or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the sum of (x) the incurrence by then-outstanding aggregate principal amount of all Indebtedness incurred pursuant to this clause (1) (taken together with the Company principal amount of any outstanding Refinancing Indebtedness under incurred pursuant to clause (13) below with respect to Indebtedness incurred pursuant to this clause (1)) and (y) the Senior Credit Facility then-outstanding aggregate principal amount of all Indebtedness incurred pursuant to clause (2(a)) below (taken together with the principal amount of any outstanding Refinancing Indebtedness incurred pursuant to clause (13) below with respect to Indebtedness incurred pursuant to such clause (2)(a)) does not exceed at any one time the sum of (A) $2,000 million and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal B) an amount equal to the face amount thereofgreater of (x) up to an aggregate principal amount $400 million and (y) 50.0% of $550 million outstanding EBITDA for the most recently ended Test Period at any one timethe time of the incurrence;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by (a) the Notes issued (including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees thereof) and (b) the Second Lien Notes (including any Guarantee thereof) outstanding on the Issuance Issue Date;
(iv3) Existing Indebtedness (other than Indebtedness described in incurred pursuant to clauses (i1) and (iii)2) of this paragraph, and after giving effect to the prepayment in full of the Obligations outstanding under the Existing Term Loan and the prepayment in full of the Obligations outstanding under the Existing Revolving Credit Facility and the termination in full of the commitments thereunder);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets) , and outstanding Refinancing Indebtedness incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 125 million or and (y) 1017.5% of Total AssetsEBITDA for the most recently ended Test Period at the time of incurrence; provided that such Indebtedness (other than Refinancing Indebtedness) exists at the date of such purchase, lease, construction, installation, repair, replacement or improvement or is created prior to or within 270 days of the completion thereof; provided, further that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding Indebtedness of the Issuer or the Restricted Subsidiaries;
(vi5) (A) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations Subsidiary with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practices, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement or indemnification obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other reimbursement-type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (Arconic Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur,” “Incurrence” and collectively, an "incurrence" of“Incurred” shall have a corresponding meaning) any Indebtedness (including Acquired Indebtedness) or Debt), and the Issuer will not issue any shares Disqualified Stock and will not permit any of Disqualified its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness or (including Acquired Debt), and the Issuer and the Restricted Subsidiaries may issue shares of Disqualified Stock Stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available Issuer’s Reference Period immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued, as the case may be, would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodReference Period.
(b) The foregoing limitations Section 4.2(a) will not apply toprohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Stock described in clause (11) below:
(i1) the incurrence Incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder the guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereofmaximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) up not to an exceed the greater of (a) $1,750 million and (b) the sum of $850.0 million and 30% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(2) the Incurrence by the Issuer and its Restricted Subsidiaries of the aggregate principal amount of $550 million outstanding at any one timeIndebtedness in existence on the Issue Date (other than Indebtedness under the New Credit Agreement), until such amounts are repaid;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii3) the incurrence Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Notes and the related guarantees to be issued on the Issuance Issue Date;
(iv4) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries to finance of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purchase, lease purpose of financing all or any part of the purchase price or cost of construction or improvement of property (real or personal) property, plant or equipment (whether through used in the direct purchase business of assets the Issuer or the Capital Stock any of any Person owning such assets) its Restricted Subsidiaries, in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other Permitted Refinancing Indebtedness then outstanding and incurred Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does at any time outstanding, not to exceed the greater of (xa) $50 150.0 million or and (yb) 105% of Total AssetsConsolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(vi5) Indebtedness incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be Incurred under Section 4.2(a) or Section 4.2(b)(2), (3), (4), (10) or (14) or this Section 4.2(b)(5);
(6) the Incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(i) if the Issuer or any Guarantor is the obligor of such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to letters the Notes, in the case of credit issued the Issuer, or the guarantee of the Notes, in the case of a Guarantor; and
(ii) (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary, will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations or Indebtedness under Treasury Management Arrangements;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.2 or (b) Indebtedness Incurred by Joint Ventures, provided that such guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or the guarantees of the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(9) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including without limitation guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in respect each case other than an obligation for money borrowed) and replacements of workers' compensation claims any of the foregoing;
(10) the Incurrence by the Issuer or self-insuranceany of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(11) the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock to the Issuer or any of its Restricted Subsidiaries, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsas the case may be; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;that:
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which Equity Interests of a Restricted Subsidiary that results in any such Restricted Subsidiary ceasing to be Disqualified Stock being held, directly or indirectly, by a Person other than the Issuer or a Restricted Subsidiary Subsidiary; and
(ii) any sale or any other subsequent transfer of any such Indebtedness (except Disqualified Stock to a Person that is not either the Company Issuer or another a Restricted Subsidiary) shall , will be deemed, in each case case, to be an incurrence constitute issuance of such IndebtednessDisqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause;
(ix12) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred Incurrence in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness which serves under letters of credit Incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit;
(13) the Incurrence by the Issuer or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Issuer’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (13) and then outstanding does not exceed $25 million; and
(14) the Incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or restructure discharge any Indebtedness incurred as permitted under paragraph or Disqualified Stock issued pursuant to this clause (14), not to exceed the greater of (a) and clauses (iii) $150.0 million and (ivb) above5% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom).
(c) The Issuer will not Incur, or and will not permit any other Guarantor to Incur, any Indebtedness issued (including Permitted Debt) that is contractually subordinated in right of payment to so refund, refinance any other Indebtedness of the Issuer or restructure such Guarantor unless such Indebtedness including additional Indebtedness incurred is also contractually subordinated in right of payment to pay premiums the Notes and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturityapplicable guarantee of the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or any such Refinancing Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior lien basis.
(d) For purposes of determining compliance with this Section 4.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Section 4.2(b)(1) through (A14) has a Weighted Average Life above, or is entitled to Maturity at be Incurred pursuant to Section 4.2(a), the time Issuer will be permitted to classify such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity item of Indebtedness being refunded on the date of its Incurrence, or refinancedlater reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.2. Indebtedness under Credit Facilities outstanding on the Issue Date under this Indenture will initially be deemed to have been Incurred on such date in reliance on the exception provided by clause (B1) of the definition of Permitted Debt.
(e) The accrual of interest, the accretion or amortization of original issue discount or deferred financing costs, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or temporary equity as Indebtedness due to the application of or a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares or units of the same class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.2; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Issuer as accrued to the extent required by the definition of such Refinancing term. Notwithstanding any other provision of this Section 4.2, the maximum amount of Indebtedness refinances Indebtedness subordinated that the Issuer or pari passu any Restricted Subsidiary may Incur pursuant to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) this Section 4.2 shall not include be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(xf) The amount of any Indebtedness outstanding as of a Subsidiary that refinances Indebtedness any date will be:
(i) the accreted value of the Company Indebtedness, in the case of any Indebtedness issued with original issue discount or deferred financing costs;
(yii) Indebtedness the principal amount of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing Indebtedness, in the case of any Senior other Indebtedness; and
(xviiii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of (a) the Fair Market Value of such assets at the date of determination; and (b) the amount of the Indebtedness of the other Person.
(g) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or Disqualified Stock first committed, in the case of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenturerevolving credit debt; provided that if such Indebtedness or Disqualified Stock is not incurred Incurred to refinance other Indebtedness denominated in contemplation a foreign currency, and such refinancing 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 acquisition or merger; and provided further that after giving effect refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such acquisition, either refinancing Indebtedness does not exceed (Ai) the Company would be permitted to incur at least $1.00 principal amount of additional such Indebtedness under paragraph being refinanced plus (a) or (Bii) the Fixed Charge Coverage Ratio aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is greater than immediately prior to denominated that is in effect on the date of such acquisitionrefinancing.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Parent shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and Parent shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuers or Guarantors, preferred stock; provided, however, provided that the Company Parent may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of Parent and the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application 1.00; provided, further, that the amount of the net proceeds therefrom)Indebtedness, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issuedand preferred stock that may be incurred pursuant to the foregoing, as together with any amounts incurred under Section 1011(b)(14)(x) by Restricted Subsidiaries that are not the case may be, Issuers or Guarantors shall not exceed the greater of (x) €130.0 million and the application (y) 7.5% of proceeds had occurred Consolidated Total Assets at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) Indebtedness incurred pursuant to Credit Facilities by Parent or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of $550 million outstanding all Indebtedness incurred under this clause (1) does not exceed at any one timetime the sum of (a) $1,800 million or the Euro equivalent thereof plus (b) €215 million;;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Dateoffered hereby (including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iv3) Existing Indebtedness (other than Indebtedness described in clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Parent or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets, and all Refinancing Indebtedness (having the meaning set forth in clause (13) below) incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 €75.0 million or and (y) 104.5% of Consolidated Total AssetsAssets at the time of incurrence; provided that such Indebtedness (other than Refinancing Indebtedness) exists at the date of such purchase, lease, construction, installation, repair, replacement or improvement or is created prior to or within 270 days of the completion thereof; provided, further that Capitalized Lease Obligations incurred by Parent or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by Parent or such Restricted Subsidiary to permanently repay outstanding Indebtedness of Parent or the Restricted Subsidiaries;
(vi5) (1) Indebtedness incurred by the Company Parent or any of its Restricted Subsidiaries constituting reimbursement obligations Subsidiary with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practice, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement or indemnification obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other reimbursement-type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (Garrett Motion Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, assume or directly or indirectly guarantee or otherwise in any other manner become directly or indirectly liable with respect to for (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired IndebtednessDebt) or issue any shares Disqualified Stock if, at the time of and immediately after giving pro forma effect to such incurrence of Indebtedness or issuance of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares Debt to Operating Cash Flow Ratio of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional is more than 7.0:1; provided that any Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of Senior Debt that is permitted to be incurred hereunder by the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured shall, at the time received and without giving effect of incurrence, have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Notes.
(b) Section 4.07(a) will not apply to the incurrence of any subsequent changes in valueof the following (collectively, "Permitted Indebtedness"):
(i) actually received by Senior Bank Debt arising under the Company and its Restricted Subsidiaries in connection with such dispositionCredit Agreement;
(viiiii) Indebtedness of any Restricted Subsidiary consisting of a guarantee of the Company's Senior Bank Debt under the New Credit Agreement;
(iii) Indebtedness of the Company represented by the Notes and Indebtedness of any Subsidiary Guarantor represented by a Subsidiary Guarantee;
(iv) Indebtedness owed by any Wholly Owned Restricted Subsidiary to a the Company or to another Wholly Owned Restricted Subsidiary, or owed by the Company to any Wholly Owned Restricted Subsidiary; provided that any such Indebtedness shall be at all times held by a Person which is made pursuant to an intercompany note and is subordinated in right of payment to either the Notes; provided further that any subsequent issuance Company or transfer of any Capital Stock or any other event which results in any such a Wholly Owned Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company; and provided, further, that upon either (a) the transfer or any other subsequent transfer disposition of any such Indebtedness (except to a Person other than the Company or another Wholly Owned Restricted Subsidiary or (b) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of any such Wholly Owned Restricted Subsidiary to a Person other than the Company or another Wholly Owned Restricted Subsidiary) , the incurrence of such Indebtedness shall be deemed, in each case deemed to be an incurrence of such Indebtednessthat is not permitted by this clause (iv);
(ixv) Indebtedness guarantees of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated are made in right accordance with the provisions of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessSection 4.15;
(xvi) Hedging Indebtedness arising with respect to Interest Rate Agreement Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesoutstanding;
(xivii) obligations Purchase Money Indebtedness and Capital Lease Obligations which do not exceed, as determined in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary accordance with GAAP, $10,000,000 in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(Aviii) any guarantee by Indebtedness incurred in connection with or given in exchange for the Company of Indebtedness renewal, extension, substitution, refunding, defeasance, refinancing or other obligations replacement of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture described in clauses (i), (ii) and (Biii) any Excluded Guarantee above (as defined in paragraph "Refinancing Indebtedness"); provided that (a) the principal amount of Section 1014) such Refinancing Indebtedness shall not exceed the principal amount of a Restricted Subsidiary;
the Indebtedness so renewed, extended, substituted, refunded, defeased, refinanced or replaced (xv) plus the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees paid in connection therewith (which shall not exceed the "Refinancing Indebtedness"stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced) prior and the expenses incurred in connection therewith); (b) with respect to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has of any Indebtedness other than Senior Debt, the Refinancing Indebtedness shall have a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less equal to or greater than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded renewed, extended, substituted, refunded, defeased, refinanced or refinanced, replaced; and (Bc) with respect to the extent such Refinancing Indebtedness refinances of Indebtedness subordinated or pari passu to other than Senior Debt incurred by (1) the NotesCompany, such Refinancing Indebtedness is subordinated or pari passu shall rank no more senior, and shall be at least as subordinated, in right of payment to the Notes at least to the same extent as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or refunded replaced, and (C2) shall not include (x) Indebtedness of a Subsidiary that refinances Guarantor, such Refinancing Indebtedness shall rank no more senior, and shall be at least as subordinated, in right of payment to the Company Subsidiary Guarantee as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced;
(yix) Indebtedness of the Company in addition to that described in clauses (i) through (viii) above, and any renewals, extensions, substitutions, refinancings or a Restricted Subsidiary that refinances replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of incurred pursuant to this clause (xvix) will does not apply to exceed $15,000,000 at any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionone time outstanding.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, assume or directly or indirectly guarantee or otherwise in any other manner become directly or indirectly liable with respect to for (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired IndebtednessDebt) or issue any shares Disqualified Stock if, at the time of and immediately after giving pro forma effect to such incurrence of Indebtedness or issuance of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares Debt to Operating Cash Flow Ratio of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional is more than 7.0:1; provided that any Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of Senior Debt that is permitted to be incurred hereunder by the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured shall, at the time received and without giving effect of incurrence, have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Notes.
(b) Section 4.07(a) will not apply to the incurrence of any subsequent changes in valueof the following (collectively, "Permitted Indebtedness"):
(i) actually received by Senior Bank Debt arising under the Company and its Restricted Subsidiaries in connection with such dispositionCredit Agreement;
(viiiii) Indebtedness of any Restricted Subsidiary consisting of a guarantee of the Company's Senior Bank Debt under the New Credit Agreement;
(iii) Indebtedness of the Company represented by the Notes and Indebtedness of any Subsidiary Guarantor represented by a Subsidiary Guarantee;
(iv) Indebtedness owed by any Wholly Owned Restricted Subsidiary to a the Company or to another Wholly Owned Restricted Subsidiary, or owed by the Company to any Wholly Owned Restricted Subsidiary; provided that any such Indebtedness shall be at all times held by a Person which is made pursuant to an intercompany note and is subordinated in right of payment to either the Notes; provided further that any subsequent issuance Company or transfer of any Capital Stock or any other event which results in any such a Wholly Owned Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company; and provided, further, that upon either (a) the transfer or any other subsequent transfer disposition of any such Indebtedness (except to a Person other than the Company or another Wholly Owned Restricted Subsidiary or (b) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of any such Wholly Owned Restricted Subsidiary to a Person other than the Company or another Wholly Owned Restricted Subsidiary) , the incurrence of such Indebtedness shall be deemed, in each case deemed to be an incurrence of such Indebtednessthat is not permitted by this clause (iv);
(ixv) Indebtedness guarantees of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated are made in right accordance with the provisions of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessSection 4.15;
(xvi) Hedging Indebtedness arising with respect to Interest Rate Agreement Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesoutstanding;
(xivii) obligations Purchase Money Indebtedness and Capital Lease Obligations which do not exceed, as determined in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary accordance with GAAP, $10,000,000 in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(Aviii) any guarantee by Indebtedness incurred in connection with or given in exchange for the Company of Indebtedness renewal, extension, substitution, refunding, defeasance, refinancing or other obligations replacement of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture described in clauses (i), (ii) and (Biii) any Excluded Guarantee above (as defined in paragraph "Refinancing Indebtedness"); provided that (a) the principal amount of Section 1014) such Refinancing Indebtedness shall not exceed the principal amount of a Restricted Subsidiary;
the Indebtedness so renewed, extended, sub- stituted, refunded, defeased, refinanced or replaced (xv) plus the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees paid in connection therewith (which shall not exceed the "Refinancing Indebtedness"stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced) prior and the expenses incurred in connection therewith); (b) with respect to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has of any Indebtedness other than Senior Debt, the Refinancing Indebtedness shall have a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less equal to or greater than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded renewed, extended, substituted, refunded, defeased, refinanced or refinanced, replaced; and (Bc) with respect to the extent such Refinancing Indebtedness refinances of Indebtedness subordinated or pari passu to other than Senior Debt incurred by (1) the NotesCompany, such Refinancing Indebtedness is subordinated or pari passu shall rank no more senior, and shall be at least as subordinated, in right of payment to the Notes at least to the same extent as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or refunded replaced, and (C2) shall not include (x) Indebtedness of a Subsidiary that refinances Guarantor, such Refinancing Indebtedness shall rank no more senior, and shall be at least as subordinated, in right of payment to the Company Subsidiary Guarantee as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced;
(yix) Indebtedness of the Company in addition to that described in clauses (i) through (viii) above, and any renewals, extensions, substitutions, refinancings or a Restricted Subsidiary that refinances replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of incurred pursuant to this clause (xvix) will does not apply to exceed $15,000,000 at any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionone time outstanding.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incurINCUR" and 101 collectively, an "incurrence" ofINCURRENCE") any Indebtedness (including Acquired Indebtedness) or and that the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will Section 1010(a) shall not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 415.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; providedPROVIDED, however, HOWEVER that the amount of Indebtedness outstanding under incurred by Restricted Subsidiaries pursuant to this clause (i) above and this clause (ii) shall does not in the aggregate exceed $550 50.0 million (or the equivalent thereof in any other currency) at any one time outstanding;
(iiiii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 30.0 million or (y) 10% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; providedPROVIDED, howeverHOWEVER, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; providedPROVIDED, howeverHOWEVER, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided PROVIDED that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further PROVIDED FURTHER that any subsequent issuance or transfer of any Capital Stock or any other event which results will result in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; PROVIDED that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided PROVIDED that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further PROVIDED FURTHER that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 75.0 million at any one time outstanding; providedPROVIDED, howeverHOWEVER, that (A) Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 50.0 million (or the equivalent thereof in any other currency) at any one time outstanding and (B) Indebtedness of a Restricted Subsidiary organized under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, which when aggregated with the principal amount of all other Indebtedness of such Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $50.0 million at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 10141014 hereof) of a Restricted Subsidiary;; 104
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) of this Section 1010 and clauses (iiiii) and (iviii) aboveof this paragraph (b), or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing IndebtednessREFINANCING INDEBTEDNESS") prior to its respective maturity; providedPROVIDED, howeverHOWEVER, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further PROVIDED FURTHER that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (athe provisions of Section 1010(a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.; and
(xvii) The incurrence by the Company of Indebtedness represented by the Subordinated Notes. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvii) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to paragraph (a) of this Section 1010. Accrual of interest, the accretion of ACCREDITED value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 1010. 105
Appears in 1 contract
Samples: Indenture (Boyds Collection LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively, an "incurrence" of) Incur any Indebtedness (including Acquired Indebtedness) or and the Company shall not issue any shares of Disqualified StockStock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will shall not apply to:
(i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 100.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence Incurrence by the Company of Indebtedness represented by the Notes Securities issued on the Issuance Closing Date;
(iviii) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred Incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoIncurred to refund, refinance or replace any other Indebtedness Incurred pursuant to this Section 4.03(b)(iv), does not exceed the greater of (x) $50 15.0 million or (y) 1010.0% of Total Assets;
(viv) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrenceIncurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (Aa) such Indebtedness is not reflected as a dollar amount on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (Aa)) and (Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the NotesSecurities; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results will result in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence Incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of such shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (Aa) any such Indebtedness is made pursuant to an intercompany note and (Bb) if a Guarantor incurs Incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case case, to be an incurrence Incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred Incurred in the ordinary course of business (Aa) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (Bb) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness and Disqualified Stock of the Company and Indebtedness and preferred stock of any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder under this Section 4.03 in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness and Disqualified Stock then outstanding and incurred Incurred pursuant to this clause Section 4.03 (xiiib)(xiii), does not exceed $150 20.0 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred Incurred pursuant to this clause (xiiiSection 4.03(b)(xiii), does not exceed $75 15.0 million (or the equivalent thereof in any other currency) at any one time outstandingoutstanding (it being understood that any Indebtedness Incurred pursuant to this Section 4.03(b)(xiii) shall cease to be deemed Incurred or outstanding for purposes of this Section 4.03(b)(xiii) but shall be deemed to be Incurred for purposes of Section 4.03(a) from and after the first date on which the Company could have Incurred such Indebtedness under Section 4.03(a) without reliance on this Section 4.03(b)(xiii);
(Aa) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence Incurrence of such Indebtedness incurred Incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (Bb) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred Incurred as permitted under paragraph (aSection 4.03(a) and clauses (iiiii) and (iviii) aboveof this Section 4.03(b), this clause (xv) and clause (xvi) below or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred Incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (Bb) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the NotesSecurities, such Refinancing Indebtedness is subordinated or pari passu to the Notes Securities at least to the same extent as the Indebtedness being refinanced or refunded and (Cc) shall not include (x1) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y2) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred Incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisitionacquisition or merger, either (Aa) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness under paragraph (apursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (Bb) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionacquisition or merger; and
(xvii) Indebtedness Incurred in respect of the Indemnity Agreement.
(c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvii) of Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.03 and such item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a) except as otherwise set forth in Section 4.03(b)(xiii). Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03.
Appears in 1 contract
Samples: Indenture (Evenflo Co Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of") any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPROVIDED, howeverHOWEVER, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 325.0 million outstanding at any one time; PROVIDED that Indebtedness incurred by Restricted Subsidiaries pursuant to this clause (i) does not exceed $80.0 million at any one time outstanding unless incurred under a Receivables Facility;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (Accuride Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur,” “Incurrence” and collectively, an "incurrence" of“Incurred” shall have a corresponding meaning) any Indebtedness (including Acquired Indebtedness) or Debt), and the Issuer will not issue any shares Disqualified Stock and will not permit any of Disqualified its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness or (including Acquired Debt), and the Issuer and the Restricted Subsidiaries may issue shares of Disqualified Stock Stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available Issuer’s Reference Period immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued, as the case may be, would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodReference Period.
(b) The foregoing limitations Section 4.2(a) will not apply toprohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Stock described in clause (11) below:
(i1) the incurrence Incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder the guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause
(1) (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereofmaximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) up not to an exceed the greater of (a) $1,750 million and (b) the sum of $850.0 million and 30% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(2) the Incurrence by the Issuer and its Restricted Subsidiaries of the aggregate principal amount of $550 million outstanding at any one timeIndebtedness in existence on the Issue Date (other than Indebtedness under the Existing Credit Agreement or, if applicable, the New Credit Agreement), until such amounts are repaid;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii3) the incurrence Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by (i) the Notes to be issued on the Issuance Issue Date and the guarantees to be issued on the Effective Date, (ii) the new senior notes to be issued by the Company on or about the Effective Date in exchange for the Existing HIP Notes and related guarantees and (iii) any other Existing HIP Notes assumed by the Company upon the consummation of the Reorganization and the related guarantees;
(iv4) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries to finance of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purchase, lease purpose of financing all or any part of the purchase price or cost of construction or improvement of property (real or personal) property, plant or equipment (whether through used in the direct purchase business of assets the Issuer or the Capital Stock any of any Person owning such assets) its Restricted Subsidiaries, in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other Permitted Refinancing Indebtedness then outstanding and incurred Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does at any time outstanding, not to exceed the greater of (xa) $50 150.0 million or and (yb) 105% of Total AssetsConsolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(vi5) Indebtedness incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be Incurred under Section 4.2(a) or Section 4.2(b)(2), (3), (4), (10) or (14) or this Section 4.2(b)(5);
(6) the Incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(i) if the Issuer or any Guarantor is the obligor of such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to letters the Notes, in the case of credit issued the Issuer, or the guarantee of the Notes, in the case of a Guarantor; and
(ii) (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary, will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations or Indebtedness under Treasury Management Arrangements;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.2 or (b) Indebtedness Incurred by Joint Ventures, provided that such guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or the guarantees of the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(9) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including without limitation guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in respect each case other than an obligation for money borrowed) and replacements of workers' compensation claims any of the foregoing;
(10) the Incurrence by the Issuer or self-insuranceany of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(11) the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock to the Issuer or any of its Restricted Subsidiaries, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsas the case may be; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;that:
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which Equity Interests of a Restricted Subsidiary that results in any such Restricted Subsidiary ceasing to be Disqualified Stock being held, directly or indirectly, by a Person other than the Issuer or a Restricted Subsidiary Subsidiary; and
(ii) any sale or any other subsequent transfer of any such Indebtedness (except Disqualified Stock to a Person that is not either the Company Issuer or another a Restricted Subsidiary) shall , will be deemed, in each case case, to be an incurrence constitute issuance of such IndebtednessDisqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause;
(ix12) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred Incurrence in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness which serves under letters of credit Incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit;
(13) the Incurrence by the Issuer or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Issuer’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (13) and then outstanding does not exceed $25 million; and
(14) the Incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or restructure discharge any Indebtedness incurred as permitted under paragraph or Disqualified Stock issued pursuant to this clause (14), not to exceed the greater of (a) and clauses (iii) $150.0 million and (ivb) above5% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom).
(c) The Issuer will not Incur, or and will not permit any other Guarantor to Incur, any Indebtedness issued (including Permitted Debt) that is contractually subordinated in right of payment to so refund, refinance any other Indebtedness of the Issuer or restructure such Guarantor unless such Indebtedness including additional Indebtedness incurred is also contractually subordinated in right of payment to pay premiums the Notes and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturityapplicable guarantee of the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or any such Refinancing Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior lien basis.
(d) For purposes of determining compliance with this Section 4.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Section 4.2(b)(1) through (A14) has a Weighted Average Life above, or is entitled to Maturity at be Incurred pursuant to Section 4.2(a), the time Issuer will be permitted to classify such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity item of Indebtedness being refunded on the date of its Incurrence, or refinancedlater reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.2. Indebtedness under Credit Facilities outstanding on the Effective Date under this Indenture will initially be deemed to have been Incurred on such date in reliance on the exception provided by clause (B1) of the definition of Permitted Debt.
(e) The accrual of interest, the accretion or amortization of original issue discount or deferred financing costs, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or temporary equity as Indebtedness due to the application of or a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares or units of the same class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.2; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Issuer as accrued to the extent required by the definition of such Refinancing term. Notwithstanding any other provision of this Section 4.2, the maximum amount of Indebtedness refinances Indebtedness subordinated that the Issuer or pari passu any Restricted Subsidiary may Incur pursuant to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) this Section 4.2 shall not include be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(xf) The amount of any Indebtedness outstanding as of a Subsidiary that refinances Indebtedness any date will be:
(i) the accreted value of the Company Indebtedness, in the case of any Indebtedness issued with original issue discount or deferred financing costs;
(yii) Indebtedness the principal amount of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing Indebtedness, in the case of any Senior other Indebtedness; and
(xviiii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of (a) the Fair Market Value of such assets at the date of determination; and (b) the amount of the Indebtedness of the other Person.
(g) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or Disqualified Stock first committed, in the case of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenturerevolving credit debt; provided that if such Indebtedness or Disqualified Stock is not incurred Incurred to refinance other Indebtedness denominated in contemplation a foreign currency, and such refinancing 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 acquisition or merger; and provided further that after giving effect refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such acquisition, either refinancing Indebtedness does not exceed (Ai) the Company would be permitted to incur at least $1.00 principal amount of additional such Indebtedness under paragraph being refinanced plus (a) or (Bii) the Fixed Charge Coverage Ratio aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is greater than immediately prior to denominated that is in effect on the date of such acquisitionrefinancing.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will notNeither Financeco nor Solectron shall, and will Solectron shall not permit any of its other Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, guarantee or otherwise become directly liable, contingently or indirectly liable otherwise, with respect to (collectively, "“incur" and collectively, an "incurrence" of”) any Indebtedness (including Acquired Indebtedness) or Debt), and neither Financeco nor Solectron shall issue any Disqualified Stock and Solectron shall not permit any of its other Restricted Subsidiaries to issue any shares of Disqualified Stockpreferred stock; provided, however, that the Company Financeco and Solectron may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and Solectron’s other Restricted Subsidiaries may incur Indebtedness or issue shares of Disqualified Stock preferred stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Solectron’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will provisions of Section 4.7(a) hereof shall not apply to:prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(i1) the incurrence by the Company Solectron and its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder under any Credit Agreements (with letters of credit and bankers' acceptances being deemed plus any Permitted Refinancing Indebtedness incurred to have a principal amount equal to the face amount thereofextend, retire, renew, defease, refinance, replace or refund such Indebtedness) up to in an aggregate principal amount of $550 million outstanding at any one time;
time outstanding under this clause (1) not to exceed the greater of (A) $500,000,000; and (B) the sum of (i) 85% of the value of Solectron’s and its Restricted Subsidiaries’ accounts receivable (before giving effect to any related reserves) shown on Solectron’s most recent Consolidated balance sheet prepared in accordance with GAAP that are not more than 90 days past due, plus (ii) 60% of the inventory shown on Solectron’s most recent Consolidated balance sheet in accordance with GAAP; in each case minus the amount of any Real Estate Financing Transactionsuch Indebtedness (X) retired with the Net Cash Proceeds from any Asset Sale applied to permanently reduce the outstanding amounts or the commitments with respect to such Indebtedness as required pursuant to Section 4.12 hereof or (Y) assumed by a transferee in an Asset Sale; providedprovided that, however, that solely for purposes of calculating the amount of Indebtedness outstanding which may be incurred pursuant to this Section 4.7(b)(1), any Indebtedness incurred pursuant to Section 4.7(b)(12) will be deemed to have been incurred under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstandingSection 4.7(b)(1)(B);
(iii2) the incurrence by Solectron and its Restricted Subsidiaries of the Company Existing Indebtedness;
(3) the incurrence by Financeco of Indebtedness represented by the Notes and by Solectron of the Guarantee, in each case to be issued on the Issuance DateIssue Date and the incurrence by Financeco of Indebtedness represented by the Exchange Notes and by Solectron of the related Guarantee, in each case to be issued upon consummation of the Exchange Offer made pursuant to the Registration Rights Agreement;
(iv4) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the incurrence by the Company Solectron or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to finance the purchaseextend, lease refund, renew, refinance, defease or improvement of property replace Indebtedness (real or personalother than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.7(a) or equipment clauses (whether through the direct purchase of assets 2), (3) or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v4) (together with any Refinancing Indebtedness with respect theretoof Section 4.7(b), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi5) Indebtedness incurred the incurrence or issuance by the Company Solectron or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course intercompany Indebtedness, Disqualified Stock or preferred stock between or among Solectron and any of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsits Restricted Subsidiaries; provided, however, that upon that:
(A) if either Financeco or Solectron is the drawing of such letters of credit or the incurrence of obligor on such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not must be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is contractually subordinated in right of payment to the Notesprior payment of all Obligations with respect to the Notes and the Guarantee, respectively; provided further that and
(B) (i) any subsequent issuance or transfer of any Capital Stock Equity Interests or any other event which transaction that results in any such Restricted Subsidiary ceasing to be Indebtedness, Disqualified Stock or preferred stock being held by a Person other than Solectron or a Restricted Subsidiary of Solectron and (ii) any sale or any other subsequent transfer of any such Indebtedness (except Indebtedness, Disqualified Stock or preferred stock to the Company a Person that is not either Solectron or another a Restricted Subsidiary) shall Subsidiary of Solectron, will be deemed, in each case case, to be constitute an incurrence of such Indebtedness, Disqualified Stock or preferred stock by Solectron or such Restricted Subsidiary, as the case may be, that was not permitted by this Section 4.7(b)(5);
(ix6) Indebtedness the incurrence by Solectron or any of a its Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right Subsidiaries of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any floating and/or fixed rate Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk or commodity price risk and not with respect to any currency exchangesthe purpose of speculation;
(xi7) obligations the Guarantee by Solectron of Indebtedness of Solectron or a Restricted Subsidiary of Solectron or the Guarantee (given reasonably contemporaneously with the incurrence of Indebtedness being guaranteed) by a Restricted Subsidiary of Solectron of Indebtedness of any other Restricted Subsidiary of Solectron, in each case that was permitted to be incurred by another provision of this Section 4.7 and by Section 4.14;
(8) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the accumulation of dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries (to the extent not paid) and the payment of dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries in the form of additional shares of the same class of Disqualified Stock or preferred stock of Restricted Subsidiaries will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of Solectron as accrued;
(9) the incurrence by Solectron or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock of Restricted Subsidiaries in an aggregate principal amount (or accreted value or liquidation preference, as applicable) at any time outstanding incurred pursuant to this Section 4.7(b)(9), not to exceed $150,000,000;
(10) Indebtedness incurred solely in respect of bankers acceptances, letters of credit and performance and surety bonds and completion guarantees provided by (to the Company extent that such incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money or any Restricted Subsidiary other Indebtedness), all in the ordinary course of businessbusiness in amounts and for the purposes customary in Solectron’s industry;
(xii11) the incurrence of Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million 200,000,000 at any one time outstanding; provided, however, that Indebtedness outstanding as a part of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (a Cash Repatriation Transaction for tax planning or the equivalent thereof in any other currency) at any one time outstandingcash repatriation purposes;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv12) the incurrence by the Company Solectron or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage or equipment financings or other Indebtedness or Disqualified Stock, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of engineering, installation, acquisition, lease, construction or improvement of property, plant or equipment used in the business of Solectron or such Restricted Subsidiary, in an aggregate principal amount, liquidation amount, or accreted value, as applicable, not to exceed 10% of Total Assets at any time outstanding; provided that solely for purposes of calculating the amount of Indebtedness which serves may be incurred pursuant to refundthis Section 4.7(b)(12), refinance or restructure any Indebtedness incurred pursuant to Section 4.7(b)(1)(B) will be deemed to have been incurred under this Section 4.7(b)(12);
(13) the incurrence by Solectron and its Restricted Subsidiaries of Acquired Debt (other than Acquired Debt Incurred as permitted under paragraph consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Subsidiary of Solectron or its Restricted Subsidiary or was otherwise acquired by Solectron or its Restricted Subsidiary), provided, that such incurrence does not result, on a pro forma basis for the transaction with which the Acquired Debt is incurred, in Solectron’s Consolidated Fixed Charge Coverage Ratio decreasing immediately after such incurrence from Solectron’s Consolidated Fixed Charge Coverage Ratio in effect immediately prior to such incurrence; and
(a14) and clauses the incurrence of Indebtedness to provide credit support put in place in connection with the Receivables Financing Program in an aggregate amount at any one time outstanding not to exceed $250,000,000.
(iiic) and For purposes of determining compliance with this Section 4.7, in the event that an item of proposed Indebtedness or Disqualified Stock or preferred stock of a Restricted Subsidiary, or portion thereof meets the criteria of more than one of the categories of Permitted Debt described in Section 4.7(b)(1) through (iv14) above, or any Indebtedness issued is entitled to so refundbe incurred pursuant to Section 4.7(a), refinance or restructure Financeco and Solectron will be permitted to classify such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity item of Indebtedness being refunded or refinancedDisqualified Stock or preferred stock of a Restricted Subsidiary, or portion thereof on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness or Disqualified Stock or preferred stock of a Restricted Subsidiary, or portion thereof, in any manner that complies with this Section 4.7, except that Indebtedness under the Credit Agreements (Bas described in clause (1) of the definition thereof) outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in reliance on the exception provided by Section 4.7(b)(1).
(d) For purposes of determining any particular amount of Indebtedness under this Section 4.7, Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included to the extent that including such amount shall cause duplication.
(e) For purposes of determining compliance with this Section 4.7, the U.S. dollar-equivalent principal amount of Indebtedness denominated in any currency other than U.S. dollars shall be calculated based on the relevant currency exchange rate in effect as of the date such Indebtedness is incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that the amount of any Permitted Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to denominated in the same extent currency as the Indebtedness being refinanced or refunded and (C) thereby, shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness be calculated based on the relevant exchange rate in effect as of the Company or (y) Indebtedness date of the Company or a Restricted Subsidiary that refinances incurrence of the Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionbeing so refinanced.
Appears in 1 contract
Samples: Indenture (Solectron Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise in any manner become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness (including Acquired Indebtedness) or any shares Indebtedness and the issuance of Disqualified Stock; provided), however, except that the Company and any Subsidiary Guarantors may incur Indebtedness or issue shares if, at the time of Disqualified Stock if such event, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended immediately preceding four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence available, taken as one accounting period, would have been equal to at least 1.75 (i) 2.0 to 1.00 determined on a 1.0 from the Closing Date through and including June 30, 2000 and (ii) 2.25 to 1.0 thereafter.
(b) In making the foregoing calculation for any four-quarter period that includes the Closing Date, pro forma basis (including a pro forma application of effect will be given to the net proceeds therefrom)Offering, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds such transactions had occurred at the beginning of such four-quarter period.
. In addition (b) The but without duplication), in making the foregoing limitations calculation, pro forma effect will not apply be given to:
(i) the incurrence by of such Indebtedness and (if applicable) the Company application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness under the Senior Credit Facility was incurred and the issuance and creation application of letters such proceeds occurred at the beginning of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one timesuch four-quarter period;
(ii) the incurrence, repayment or retirement of any Real Estate Financing Transactionother Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and
(iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the foregoing clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and (C) the amount of any Indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).
(c) Notwithstanding the foregoing, the Company may, and may permit its Restricted Subsidiaries to, incur the following Indebtedness ("Permitted Indebtedness"):
(i) Indebtedness of the Company or any Subsidiary Guarantor under the Amended Credit Agreement (and the incurrence by any Subsidiary Guarantor of guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed $150 million, less any amounts applied to the permanent reduction of such credit facilities pursuant to the provisions of Section 1016;
(ii) Indebtedness represented by the Notes (other than the Additional Notes) and the Subsidiary Guarantees;
(iii) Existing Indebtedness;
(iv) the incurrence by the Company of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, any Indebtedness that is permitted to be incurred under clause (ii) or (iii) above;
(v) Indebtedness owed by the Company to any Wholly Owned Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Wholly Owned Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided, however, that any Indebtedness of the Company owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the payment and performance of the Company's obligations under the Notes;
(vi) Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations incurred in the ordinary course of business;
(vii) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(viii) either (A) Capitalized Lease Obligations of the Company or any Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 60 days of the acquisition of the related property; provided, however, that the aggregate amount of Indebtedness outstanding under clause clauses (iA) above and this clause (iiB) shall does not in the aggregate exceed $550 million 5% of Consolidated Tangible Assets at any one time outstanding;
(iiiix) Guarantees by any Restricted Subsidiary made in accordance with the incurrence by the Company provisions of Indebtedness represented by the Notes issued on the Issuance DateSection 1022;
(ivx) Existing Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (other than except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness described in clauses (i) and (iii))is extinguished within two business days of incurrence;
(vxi) Indebtedness (including Capitalized Lease Obligations) incurred by of the Company or any of its Restricted Subsidiaries to finance represented by letters of credit for the purchase, lease or improvement account of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its such Restricted Subsidiaries constituting reimbursement obligations with respect Subsidiary, as the case may be, in order to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding provide security for workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such payment obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets self-insurance or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary similar requirements in the ordinary course of business;
(xii) the incurrence of Non-Recourse Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;by Permitted Joint Ventures; and
(xiii) Indebtedness of the Company and Company, any Subsidiary Guarantor or any Permitted Joint Venture not permitted by any other clause of its Foreign Subsidiaries not otherwise permitted hereunder this definition, in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant not to this clause (xiii), does not exceed $150 15 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Holdings shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "“incur" ” and collectively, an "“incurrence" of”) any Indebtedness (including Acquired Indebtedness) or ), and Holdings will not issue any shares of Disqualified Stock; provided, however, that the Company may incur Indebtedness or Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock if or Preferred Stock unless, on a Pro Forma Basis, the Fixed Charge Interest Coverage Ratio of Holdings for the Company and its Restricted Subsidiaries for the Holdings’ most recently ended four full fiscal quarters for which internal financial statements are available immediately Test Period preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application the “Ratio Test”); provided that the aggregate amount of the net proceeds therefrom)Indebtedness, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as or Preferred Stock of Restricted Subsidiaries that are not the case may be, Issuer or Note Guarantors outstanding at any one time under this Section 4.06(a) or incurred under this Section 4.06(a) and refinanced under Section 4.06(b)(13) below shall not exceed the application greater of proceeds had occurred (i) $100,000,000 and (ii) 10% of LTM EBITDA determined at the beginning date of any such four-quarter periodincurrence.
(b) The foregoing limitations will in Section 4.06(a) shall not apply to:
(i1) the incurrence by the Company of Indebtedness under the Senior pursuant to Credit Facility Facilities by Holdings or any Restricted Subsidiary, and the issuance and creation of letters of credit and bankers' ’ acceptances thereunder (with letters of credit and bankers' ’ acceptances being deemed under this Section 4.06(b)
(1) to have a principal amount equal to the face amount thereof) up to ), in an aggregate principal amount (without duplication) not to exceed the sum of: (i) $400,000,000 plus the greater of (A) LTM EBITDA determined at the date of any such incurrence and (B) $550 million outstanding at any one time;
380,000,000; and (ii) any Real Estate Financing Transaction; provided(A) in the case of Indebtedness secured by Liens on the Collateral on an equal priority basis with the Secured Notes Obligations, however, that the maximum amount of Indebtedness outstanding under clause (i) above that Holdings and its Restricted Subsidiaries could incur such that the Consolidated First Lien Net Leverage Ratio is equal to or less than 1.75 to 1.00 on a Pro Forma Basis and Refinancing Indebtedness incurred in respect of Indebtedness incurred in reliance on this clause (iiii)(A); or (B) shall not in the aggregate exceed $550 million at any time outstanding;
case of Indebtedness secured by Liens on the Collateral on a junior priority basis to the Secured Notes Obligations, the maximum amount of Indebtedness that Holdings and its Restricted Subsidiaries could incur such that Consolidated Secured Net Leverage Ratio is equal to or less than 3.25 to 1.00 on a Pro Forma Basis and Refinancing Indebtedness incurred in respect of Indebtedness incurred in reliance on this clause (iiiii)(B); (2) the incurrence by the Company Issuer and any Note Guarantor of Indebtedness represented by the Notes and related Note Guarantees (but excluding any Additional Notes issued after the Issue Date); (3) Indebtedness of Holdings and its Restricted Subsidiaries in existence on the Issuance Date;
(iv) Existing Indebtedness Issue Date (other than Indebtedness described in clauses (ib)(1) and (iii2) above));
, which Indebtedness includes the Existing Secured Notes outstanding on the Issue Date; (v4) (A) Indebtedness (including Capitalized Lease ObligationsObligations and purchase money indebtedness) incurred and Disqualified Stock incurred, issued or assumed by the Company Holdings or any of its Restricted Subsidiaries Subsidiary to finance the acquisition, purchase, lease lease, construction, repair, replacement or improvement of property (real or personal) ), equipment or equipment other assets (whether directly or through the direct purchase acquisition of assets Equity Interests of the owner thereof); provided that such Indebtedness is incurred concurrently with or within 270 days after the Capital Stock applicable acquisition, purchase, lease, construction, repair, replacement or improvement and (B) any refinance or replacement of any Person owning Indebtedness set forth in the immediately preceding clause (A); provided further, that, at the time of any such assets) in an incurrence of Indebtedness and after giving Pro Forma Effect thereto and the use of the proceeds thereof, the aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then that is outstanding and incurred pursuant to in reliance on this clause (v4) (together with any Refinancing Indebtedness with respect thereto), does shall not exceed the greater of (x) $50 million or 150,000,000 and (y) 1015% of Total Assets;
LTM EBITDA determined at the date of such incurrence; (vi5) Indebtedness incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.social security legislation,
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur” and collectively, an "incurrence" of“Incurrence”) any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company’s and its the Restricted Subsidiaries for the Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 2.00 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will Section 1010(a) shall not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' ’ acceptances thereunder (with letters of credit and bankers' ’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 580.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 50.0 million or (y) 107.5% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results will result in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Indebtedness of the Company or any Restricted Subsidiary in respect of Hedging Obligations that are incurred in the ordinary course of business business: (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or outstanding, (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesexchanges or (C) for the purpose of fixing or hedging commodity price risk;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's ’s Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 150.0 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(xiv) (A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and Indenture, (B) any Excluded Guarantee (as defined in paragraph (a) of Section 10141014 hereof) of a Restricted SubsidiarySubsidiary and (C) any Guarantee by a Restricted Subsidiary so long as the Indebtedness being guaranteed was permitted to be incurred under this Section 1010 and such Restricted Subsidiary complies with Section 1014 hereof;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) of this Section 1010 and clauses (ii), (iii), (iv) and (ivxii) aboveor clause (xvi) of this paragraph (b), or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums premiums, expenses and fees in connection therewith (the "“Refinancing Indebtedness"”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or Indebtedness of a non-Guarantor that refinances Indebtedness of a Guarantor or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (athe provisions of Section 1010(a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionacquisition or merger; and
(xvii) guarantees by the Company or its Restricted Subsidiaries of the obligations of joint ventures of the Company or its Restricted Subsidiaries; provided that the maximum aggregate amount of all such guaranteed obligations shall at no time exceed $25 million. The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Company or any Indebtedness of any Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes, or such Guarantor’s Guarantee, as the case may be. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvii) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify and may later reclassify such item of Indebtedness in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 1010. Indebtedness under the Credit Facility outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause (b)(i) above.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable with respect to for the payment of (collectively, "incur" and collectively, an Incur"incurrence" of) any Indebtedness (including any Acquired Indebtedness) ), other than Permitted Indebtedness, or issue any shares of Disqualified Stock; provided, howeverunless (1) at the time of such event and after giving effect thereto and the receipt and application of the funds therefrom, that the Company may incur Indebtedness or issue shares of Disqualified Stock if the Company's Consolidated Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence event, taken as one period, would have been at least 1.75 equal to 1.00 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the such additional Indebtedness had been incurred Incurred, or the such Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
, (b2) no Default or Event of Default shall have occurred and be continuing at the time such Indebtedness is Incurred or such Disqualified Stock is issued or would occur as a consequence of the Incurrence of such Indebtedness or the issuance of such Disqualified Stock and (3) with respect to any such Restricted Subsidiary, it is then a Subsidiary Guarantor and its Subsidiary Guarantee then constitutes a legal, valid and binding obligation of such Subsidiary Guarantor. The foregoing limitations will not apply to:
(i) the incurrence amount of any Guarantees by the Company or any Restricted Subsidiary of any Indebtedness of the Company or one or more Restricted Subsidiaries will not be deemed to be Outstanding or Incurred for purposes of this Section 9.11 in addition to the amount of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal which it Guarantees. 91 Other than to the face amount thereofextent provided in the Intercreditor Agreement, neither the Company nor any Restricted Subsidiary will be permitted to Incur any Indebtedness or other obligation, including Permitted Indebtedness, that is contractually subordinated in right of payment or security (other than Permitted Liens) up to an aggregate principal amount any other Indebtedness of $550 million outstanding at any one time;
the Company or that Restricted Subsidiary, as applicable, unless such Indebtedness is also expressly contractually subordinated in right of payment and security (iiother than Permitted Liens) any Real Estate Financing Transactionto the Notes or the Subsidiary Guarantee of that Restricted Subsidiary, as applicable, on substantially identical terms; provided, however, that the amount of no Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is contractually subordinated in right of payment or security to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a that Restricted Subsidiary that refinances Indebtedness solely by virtue of an Unrestricted Subsidiary; being unsecured, and provided further that subclauses (A) and (B) the provisions of this clause (xv) will Section 9.11 shall not apply to any refunding or refinancing prohibit tranches of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior Revolving Credit Facility being subordinated to such acquisitionother tranches of Indebtedness thereunder.
Appears in 1 contract
Samples: Intercreditor, Security and Collateral Agency Agreement (Abraxas Petroleum Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. and Preferred Stock) so long as (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired Indebtedness) or any shares of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date principal amount of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application new Indebtedness does not exceed the principal amount of the net proceeds therefromSubordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired plus any fees incurred in connection therewith), as if (b) such Indebtedness is Incurred by the additional Borrower or by a Guarantor in respect of refinanced Indebtedness had been incurred of a Guarantor and, in each case, is fully subordinated to the COFACE Facility Obligations, or the Disqualified Stock had been issuedrelated guarantee, as the case may be, and at least to the application same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired for value to the satisfaction of proceeds had occurred at the beginning of Lenders, (c) such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have has a principal amount final scheduled maturity date equal to or later than the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater earlier of (x) $50 million final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired or (y) 10% of Total Assets;
at least 91 days later than the Final Maturity Date, and (vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (Ad) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being refunded so redeemed, repurchased, acquired or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.retired;
Appears in 1 contract
Samples: Covered Export Credit Agreement (Hughes Network Systems, LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired Indebtedness) or any shares of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 675 million outstanding at any one time, less principal repayments of term loans and permanent commitment reductions with respect to revolving loans and letters of credit and banker's acceptances under the Senior Credit Facility made after the Issuance Date;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes and the issuance by the Company of the PIK Preferred Stock, in each case issued on the Issuance Date;
(iviii) Existing Indebtedness (other than (A) Indebtedness described in clauses (i) and (iii)ii) and (B) Indebtedness of any Foreign Subsidiary outstanding on the Issuance Date together with any future Indebtedness of any such Foreign Subsidiary incurred in connection with any undrawn commitment or unused line of credit in each case existing on the Issuance Date);
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets10 million;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ixviii) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(xix) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xix) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xiixi) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xii) Any Excluded Guarantee of any Restricted Subsidiary;
(xiii) Indebtedness of the Company and or any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 75 million at any one time outstanding; provided, however, that (A) Indebtedness of a Restricted Subsidiary organized under the laws of the United States, any State thereof, the District of Columbia or any territory thereof, which when aggregated with the principal amount of all other Indebtedness of such Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $25 million at any one time outstanding and (B) Indebtedness of a Foreign SubsidiariesSubsidiary, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 50 million (or the equivalent thereof in any other currency) at any one time outstandingoutstanding (Indebtedness of any Foreign Subsidiary outstanding on the Issuance Date is deemed to have been incurred and outstanding pursuant to this clause (xiii));
(Axiv) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted SubsidiaryIndenture;
(xv) PIK Preferred Stock issued as payment in kind dividends on PIK Preferred Stock and any shares of PIK Preferred Stock issued as payment in kind dividends thereon, such dividends made pursuant to the terms of the Certificate of Designations for such PIK Preferred Stock as in effect on the Issuance Date; and
(xvi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under the first paragraph (a) of this covenant and clauses (iiiii) and (iviii) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xvxvi) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (E&s Holdings Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "“incur" and collectively”), an "incurrence" of) any Indebtedness (including Acquired Indebtedness) ), other than Permitted Indebtedness, or issue any shares of Disqualified Stock; provided, howeverother than Disqualified Stock issued in connection with the Reorganization, except that the Company or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 greater than 2.5 to 1.00 determined on a 1.0. In making the foregoing calculation, pro forma basis effect will be given to: (including a pro forma i) the incurrence of such Indebtedness and the application of the net proceeds therefrom)from the incurrence of Indebtedness, including to refinance other Indebtedness, since the first day of such four-quarter period as if the additional such Indebtedness had been was incurred or the Disqualified Stock had been issued, as the case may be, and the application of such proceeds had occurred at the beginning of such four-quarter period.
, (b) The foregoing limitations will not apply to:
(iii) the incurrence incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness under was incurred, repaid or retired at the Senior Credit Facility beginning of such four-quarter period, and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence acquisition (whether by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease merger or improvement of property (real or personalotherwise) or equipment disposition (whether through the direct purchase of assets by sale, merger or the Capital Stock otherwise) of any Person owning such assets) in an aggregate principal amount whichother company, when aggregated with the principal amount entity, business or assets acquired or disposed of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in Subsidiary, as the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect case may be, since the first day of such Guarantor's Guarantee;
four-quarter period, as if such acquisition or disposition (xiiiincluding the incurrence, assumption or liability for any such Acquired Indebtedness) Indebtedness occurred at the beginning of such four-quarter period. In making a computation under the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this foregoing clause (xiiii) or (ii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) interest on Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the dated of computation had been the applicable rate for the entire period (taking into account any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of Hedging Obligations applicable to such Indebtedness incurred by if such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of Hedging Obligations have a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity remaining term at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity date of Indebtedness being refunded or refinanceddetermination in excess of 12 months), (B) to if such Indebtedness bears, at the extent such Refinancing Indebtedness refinances Indebtedness subordinated option of the Company, a fixed or pari passu to floating rate of interest, interest thereon will be computed by applying, at the Notesoption of the Company, such Refinancing Indebtedness is subordinated either the fixed or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded floating rate and (C) shall not include the amount of any Indebtedness under a revolving credit facility (x) Indebtedness of including the Senior Credit Facilities to the extent they constitute a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xvrevolving credit facility) will not apply to any refunding or refinancing be computed based on the average daily balance of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of during such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionfour-quarter period.
Appears in 1 contract
Samples: Indenture (Baytex Energy LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, assume or directly or indirectly guarantee or otherwise in any other manner become directly or indirectly liable with respect to for (collectively, "incur" and collectively, an "incurrence" of) any Indebtedness (including Acquired IndebtednessDebt) or issue any shares Disqualified Stock if, at the time of and immediately after giving pro forma effect to such incurrence of Indebtedness or issuance of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares Debt to Operating Cash Flow Ratio of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodis more than 7.0:1.
(b) The foregoing limitations Section 4.07(a) will not apply to:to the incurrence of any of the following (collectively, "Permitted Indebtedness"):
(i) the incurrence by the Company of Indebtedness Senior Bank Debt arising under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one timeAgreement;
(ii) Indebtedness of any Real Estate Financing Transaction; provided, however, that Restricted Subsidiary consisting of a guarantee of the amount of Indebtedness outstanding Company's Senior Bank Debt under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstandingCredit Agreement;
(iii) the incurrence by Indebtedness of the Company of Indebtedness represented by the Notes issued on the Issuance DateIssue Date and Indebtedness of any Subsidiary Guarantor represented by a Subsidiary Guarantee;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));of the Company represented by the Series B Notes.
(v) Indebtedness (including Capitalized Lease Obligations) incurred owed by any Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, or owed by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Wholly Owned Restricted Subsidiary; provided that any such Indebtedness shall be at all times held by a Person which is made pursuant to an intercompany note and is subordinated in right of payment to either the Notes; provided further that any subsequent issuance Company or transfer of any Capital Stock or any other event which results in any such a Wholly Owned Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company; and provided, further, that upon either (a) the transfer or any other subsequent transfer disposition of any such Indebtedness (except to a Person other than the Company or another Wholly Owned Restricted Subsidiary or (b) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of any such Wholly Owned Restricted Subsidiary to a Person other than the Company or another Wholly Owned Restricted Subsidiary) , the incurrence of such Indebtedness shall be deemed, in each case deemed to be an incurrence of such Indebtednessthat is not permitted by this clause (iv);
(ixvi) Indebtedness guarantees of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated are made in right accordance with the provisions of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessSection 4.15;
(xvii) Hedging Indebtedness arising with respect to Interest Rate Agreement Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesoutstanding;
(xiviii) obligations Purchase Money Indebtedness and Capital Lease Obligations which do not exceed, as determined in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary accordance with GAAP, $10,000,000 in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(Aix) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date;
(x) any guarantee by Indebtedness incurred in connection with or given in exchange for the Company of Indebtedness renewal, extension, substitution, refunding, defeasance, refinancing or other obligations replacement of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness described in clauses (iii), (iv) and (ix) above or incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph Debt to Operating Cash Flow Ratio pursuant to subsection (a) of this Section 1014) of a Restricted Subsidiary;
4.07 (xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph "Refinancing Indebtedness"); provided that (a) and clauses the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of the Indebtedness so renewed, extended, substituted, refunded, defeased, refinanced or replaced (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay plus the premiums and fees paid in connection therewith (which shall not exceed the "Refinancing Indebtedness"stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced) prior to its respective maturityand the expenses incurred in connection therewith); provided, however, that such (b) the Refinancing Indebtedness (A) has shall have a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less equal to or greater than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded renewed, extended, substituted, refunded, defeased, refinanced or refinanced, replaced; and (Bc) with respect to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notesof Subordinated Indebted- ness, such Refinancing new Indebtedness is subordinated or pari passu to the Notes at least or the applicable Subsidiary Guarantee, as the case may be, to the same extent as the Indebtedness being refinanced or refunded and refinanced;
(C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (yxi) Indebtedness of the Company in addition to that described in clauses (i) through (x) above, and any renewals, extensions, substitutions, refinancings or a Restricted Subsidiary that refinances replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of incurred pursuant to this clause (xvxi) will does not apply to exceed $15,000,000 at any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionone time outstanding.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Parent shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Parent shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Parent may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving pro forma effect thereto, the Fixed Charge Coverage Ratio for of the Company Parent and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period1.00.
(b) The foregoing limitations paragraph of this covenant will not apply to:prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(i) (A) Indebtedness incurred pursuant to Credit Facilities (other than the incurrence ABL Credit Facility) by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of Parent or any Restricted Subsidiary (including letters of credit and or bankers' ’ acceptances thereunder (with letters of credit and bankers' acceptances being deemed issued or created under any Credit Facility); provided that immediately after giving effect to have a any such incurrence, the then-outstanding aggregate principal amount of all Indebtedness incurred under this clause (i) does not exceed at any one time (x) $600.0 million plus (y) an additional amount if, after giving pro forma effect to the incurrence of such additional amount and the application of net proceeds therefrom, the Consolidated Secured Debt Ratio is equal to or less than 4.20:1.00 or (B) Indebtedness incurred under the face amount thereof) ABL Credit Facility by the Parent or any Restricted Subsidiary and Guarantees in respect of such Indebtedness, up to an aggregate principal amount of $550 million outstanding at any one timetime not to exceed the greater of (a) $450 million and (b) the Borrowing Base as of the date of such incurrence, provided, further, that, for purposes of determining the amount of Indebtedness that may be incurred under clause (i)(A)(y), all Indebtedness incurred under this clause (i) shall be treated as Secured Indebtedness;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date(including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iviii) Existing Indebtedness (other than Indebtedness described in incurred pursuant to clauses (i(i) and (iii)(ii) above);
(viv) Indebtedness (including Capitalized Finance Lease Obligations) , mortgage or project financings, purchase money obligations or other financings), Disqualified Stock and preferred stock incurred by the Company Parent or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, development, installation or improvement of property (real or personal) ), equipment or equipment (other fixed or capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets and Indebtedness arising from the conversion of the obligations of the Parent or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Parent or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any (iv), and all Refinancing Indebtedness with respect theretoincurred to Refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 275.0 million or and (y) 1012% of Consolidated Total AssetsAssets at the time of incurrence;
(viv) Indebtedness incurred by the Company Parent or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance, surety, appeal or similar bonds, landlord guarantees, completion guarantees or supporting indemnity, bid, warranty, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, howeverperformance or surety bonds, that upon the drawing of such letters of credit health, disability or the incurrence of such Indebtednessother employee benefits or property, such obligations are reimbursed within 30 days following such drawing casualty or incurrenceliability insurance or self-insurance;
(viivi) Indebtedness arising from agreements of the Company Parent or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company Parent to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is made pursuant to an intercompany note and not a Guarantor is subordinated in right of payment to the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Parent or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(ixviii) Indebtedness of a Restricted Subsidiary owing to the Company Parent or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from owing to a Restricted Subsidiary that is not the Issuer or a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further provided, further, that any subsequent transfer of any such Indebtedness (except to the Company Parent or another Restricted Subsidiary) shall be deemed, deemed to be an incurrence of such Indebtedness not permitted by this clause (viii);
(ix) shares of preferred stock of a Restricted Subsidiary issued to the Parent or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Parent or another Restricted Subsidiary) shall be deemed in each case to be an incurrence issuance of such Indebtednessshares of preferred stock not permitted by this clause (ix);
(x) Hedging Obligations that are incurred (excluding Hedging Obligations entered into for speculative purposes);
(xi) Indebtedness and obligations in respect of (x) self-insurance, performance, bid, appeal and surety bonds, landlord guarantees and completion guarantees and similar obligations provided by the Parent or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business and (y) deferred compensation or other similar arrangements incurred by the Parent or any of its Restricted Subsidiaries;
(xii) (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms Indebtedness, Disqualified Stock and preferred stock of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company Parent or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with amount or liquidation preference up to 100% of the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee net cash proceeds received by the Company Parent since immediately after the Issue Date from the issue or sale of Indebtedness Equity Interests of the Parent or cash contributed to the capital of the Parent (in each case, other obligations than Excluded Contributions or proceeds of any Disqualified Stock or sales of its Restricted Subsidiaries so long as Equity Interests to the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred Subsidiaries) as permitted under paragraph (a) and determined in accordance with clauses (iiiC)(2) and (ivC)(3) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (BSection 10.06(a) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated net cash proceeds or pari passu cash have not been applied pursuant to the Notessuch clauses to make Restricted Payments or to make other Investments, such Refinancing Indebtedness is subordinated payments or pari passu exchanges pursuant to the Notes at least Section 10.06(b) or to the same extent as the Indebtedness being refinanced or refunded and make Permitted Investments (C) shall not include other than Permitted Investments specified in clauses (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or 1), (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A2) and (B3) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtednessthe definition thereof); and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (GMS Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of) after the date of the Indenture any Indebtedness (including Acquired IndebtednessDebt) or and that the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stockpreferred stock; provided, however, that the Company may incur Indebtedness or (including Acquired Debt) and may issue shares of Disqualified Stock if (i) no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof and (ii) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 2.25 to 1.00 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. Indebtedness consisting of reimbursement obligations in respect of a letter of credit will be deemed to be incurred when the letter of credit is first issued. The Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness other than Non-Recourse Debt; provided, however, that Atria may incur Indebtedness under Atria's bank credit facility which is Guaranteed by the Company and its Restricted Subsidiaries up to an aggregate amount of $100 million through August 26, 1998, declining to $75 million, $50 million and $25 million in each respective one-year period thereafter. The foregoing provisions will not apply to:
(i) the incurrence by the Company of Senior Debt under the Credit Agreement in an aggregate principal amount at any time outstanding not to exceed an amount equal to $2.0 billion less the aggregate amount of all mandatory payments applied to permanently reduce the commitments with respect to such Indebtedness;
(ii) the incurrence by the Company of Indebtedness represented by the Securities;
(iii) Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund, Indebtedness that was permitted by the Indenture to be incurred (including, without limitation, Existing Indebtedness);
(v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that upon either (a) the transfer or other disposition by a Restricted Subsidiary or the Company of any Indebtedness so permitted under this clause (v) to a Person other than the Company or a Restricted Subsidiary or (b) the issuance, sale, transfer or other disposition of Equity Interests (including by consolidation or merger) in a Restricted Subsidiary to a Person other than the Company or a Restricted Subsidiary which results in such Restricted Subsidiary ceasing to be a Restricted Subsidiary, the provisions of this clause (v) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations or Guarantees thereof, provided that such Hedging Obligations are incurred for the purpose of fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by the Indenture to be outstanding or any receivable or liability, the payment of which is determined by reference to a foreign currency; provided that the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by performance bonds, standby letters of credit or appeal bonds, in each case to the extent incurred in the ordinary course of business of the Company or such Restricted Subsidiary;
(viii) the incurrence by any Restricted Subsidiary of the Company of Indebtedness, the aggregate principal amount of which, together with all other Indebtedness of the Company's Restricted Subsidiaries at the time outstanding (excluding Existing Indebtedness until repaid or refinanced), does not exceed the greater of (1) 10% of the Company's Stockholders' Equity as of the date of incurrence or (2) $10 million; provided that, in the case of clause (1) only, the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness (including Acquired Subsidiary Debt) is incurred would have been at least 2.25 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional such Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.; provided further, that solely for the purpose of determining whether the aggregate principal amount of Indebtedness of the Company's Restricted Subsidiaries at any time outstanding exceeds 10% of the Company's Stockholders' Equity, Acquired Subsidiary Debt shall be excluded; and
(b) The foregoing limitations will not apply to:
(iix) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation (in addition to Indebtedness permitted by any other clause of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsparagraph) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then at any time outstanding and incurred pursuant not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition50.0 million.
Appears in 1 contract
Samples: Indenture (Vencor Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur,” “Incurrence” and collectively, an "incurrence" of“Incurred” shall have a corresponding meaning) any Indebtedness (including Acquired Indebtedness) or Debt), and the Issuer will not issue any shares Disqualified Stock and will not permit any of Disqualified its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness or (including Acquired Debt), and the Issuer and the Restricted Subsidiaries may issue shares of Disqualified Stock Stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available Issuer’s Reference Period immediately preceding the date of on which such incurrence additional Indebtedness is Incurred or such Disqualified Stock is issued, as the case may be, would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred Incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodReference Period.
(b) The foregoing limitations Section 4.2(a) will not apply toprohibit the Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Stock described in clause (11) below:
(i1) the incurrence Incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder the guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereofmaximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) up not to an exceed the greater of (a) $1,850 million and (b) the sum of $850.0 million and 30% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(2) the Incurrence by the Issuer and its Restricted Subsidiaries of the aggregate principal amount of $550 million outstanding at any one timeIndebtedness in existence on the Issue Date (other than Indebtedness under the Credit Agreement), until such amounts are repaid;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii3) the incurrence Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Notes and the Guarantees to be issued on the Issuance Issue Date;
(iv4) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries to finance of Indebtedness represented by Financing Leases, mortgage financings or purchase money obligations, in each case, Incurred for the purchase, lease purpose of financing all or any part of the purchase price or cost of construction or improvement of property (real or personal) property, plant or equipment (whether through used in the direct purchase business of assets the Issuer or the Capital Stock any of any Person owning such assets) its Restricted Subsidiaries, in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other Permitted Refinancing Indebtedness then outstanding and incurred Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does at any time outstanding, not to exceed the greater of (xa) $50 175.0 million or and (yb) 105% of Total AssetsConsolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom);
(vi5) Indebtedness incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be Incurred under Section 4.2(a) or Section 4.2(b)(2), (3), (4), (10) or (14) or this Section 4.2(b)(5);
(6) the Incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(i) if the Issuer or any Guarantor is the obligor of such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to letters the Notes, in the case of credit issued the Issuer, or the guarantee of the Notes, in the case of a Guarantor; and
(ii) (x) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary and (y) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary, will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations or Indebtedness under Treasury Management Arrangements;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.2 or (b) Indebtedness Incurred by Joint Ventures, provided that such guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or the guarantees of the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(9) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including without limitation guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in respect each case other than an obligation for money borrowed) and replacements of workers' compensation claims any of the foregoing;
(10) the Incurrence by the Issuer or self-insuranceany of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(11) the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock to the Issuer or any of its Restricted Subsidiaries, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsas the case may be; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;that:
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which Equity Interests of a Restricted Subsidiary that results in any such Restricted Subsidiary ceasing to be Disqualified Stock being held, directly or indirectly, by a Person other than the Issuer or a Restricted Subsidiary Subsidiary; and
(ii) any sale or any other subsequent transfer of any such Indebtedness (except Disqualified Stock to a Person that is not either the Company Issuer or another a Restricted Subsidiary) shall , will be deemed, in each case case, to be an incurrence constitute issuance of such IndebtednessDisqualified Stock by the Issuer or such Restricted Subsidiary that was not permitted by this clause;
(ix12) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred Incurrence in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness which serves under letters of credit Incurred pursuant to a Credit Facility, provided that such obligations are reimbursed within 10 days following the drawing of such letter of credit;
(13) the Incurrence by the Issuer or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Issuer’s or any such Restricted Subsidiary’s being a general partner of such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that, after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (13) and then outstanding does not exceed $25 million; and
(14) the Incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or restructure discharge any Indebtedness incurred as permitted under paragraph or Disqualified Stock issued pursuant to this clause (14), not to exceed the greater of (a) and clauses (iii) $175.0 million and (ivb) above5% of Consolidated Net Tangible Assets of the Issuer (determined as of the date of Incurrence and after giving effect to the use of proceeds therefrom).
(c) The Issuer will not Incur, or and will not permit any other Guarantor to Incur, any Indebtedness issued (including Permitted Debt) that is contractually subordinated in right of payment to so refund, refinance any other Indebtedness of the Issuer or restructure such Guarantor unless such Indebtedness including additional Indebtedness incurred is also contractually subordinated in right of payment to pay premiums the Notes and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturityapplicable guarantee of the Notes on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or any such Refinancing Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior lien basis.
(d) For purposes of determining compliance with this Section 4.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Section 4.2(b)(1) through (A14) has a Weighted Average Life above, or is entitled to Maturity at be Incurred pursuant to Section 4.2(a), the time Issuer will be permitted to classify such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity item of Indebtedness being refunded on the date of its Incurrence, or refinancedlater reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.2. Indebtedness under Credit Facilities outstanding on the Issue Date under this Indenture will initially be deemed to have been Incurred on such date in reliance on the exception provided by clause (B1) of the definition of Permitted Debt.
(e) The accrual of interest, the accretion or amortization of original issue discount or deferred financing costs, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or temporary equity as Indebtedness due to the application of or a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares or units of the same class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.2; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Issuer as accrued to the extent required by the definition of such Refinancing term. Notwithstanding any other provision of this Section 4.2, the maximum amount of Indebtedness refinances Indebtedness subordinated that the Issuer or pari passu any Restricted Subsidiary may Incur pursuant to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) this Section 4.2 shall not include be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(xf) The amount of any Indebtedness outstanding as of a Subsidiary that refinances Indebtedness any date will be:
(i) the accreted value of the Company Indebtedness, in the case of any Indebtedness issued with original issue discount or deferred financing costs;
(yii) Indebtedness the principal amount of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing Indebtedness, in the case of any Senior other Indebtedness; and
(xviiii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of (a) the Fair Market Value of such assets at the date of determination; and (b) the amount of the Indebtedness of the other Person.
(g) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or Disqualified Stock first committed, in the case of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenturerevolving credit debt; provided that if such Indebtedness or Disqualified Stock is not incurred Incurred to refinance other Indebtedness denominated in contemplation a foreign currency, and such refinancing 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 acquisition or merger; and provided further that after giving effect refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such acquisition, either refinancing Indebtedness does not exceed (Ai) the Company would be permitted to incur at least $1.00 principal amount of additional such Indebtedness under paragraph being refinanced plus (a) or (Bii) the Fixed Charge Coverage Ratio aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is greater than immediately prior to denominated that is in effect on the date of such acquisitionrefinancing.
Appears in 1 contract
Samples: Indenture (Hess Midstream LP)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, either (i) the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries would be at least 2.00 to 1.00 or (ii) the Consolidated Total Debt Ratio of the Issuer and the Restricted Subsidiaries would be no greater than 6.00 to 1.00; provided, further, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $135.0 million and (y) 50.0% of EBITDA for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been Applicable Measurement Period at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) the incurrence Indebtedness incurred pursuant to Credit Facilities by the Company of Indebtedness under Issuer or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of $550 million outstanding all Indebtedness incurred under this clause (1) does not exceed at any one timetime (x) $817.5 million plus (y) the greater of $300.0 million and 115.0% of EBITDA for the Applicable Measurement Period at the time of incurrence plus (z) an additional amount if, after giving pro forma effect to the incurrence of such additional amount and the application of net proceeds therefrom, the Consolidated Secured Debt Ratio is equal to or less than 3.50 to 1.00, plus, in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, any Additional Refinancing Amount; provided that solely for purposes of calculating the Consolidated Secured Debt Ratio under this clause (1), any Indebtedness incurred under this clause (1) shall, in each case, be deemed to be secured by a Lien on assets of the Issuer and its Restricted Subsidiaries irrespective of whether such Indebtedness actually constitutes secured Indebtedness;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date(including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iv3) Existing Indebtedness (other than Indebtedness described in incurred pursuant to clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, development, installation or improvement of property (real or personal) ), equipment or equipment (other fixed or capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets and Indebtedness arising from the conversion of the obligations of the Issuer or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any 4), and all Refinancing Indebtedness with respect theretoincurred to Refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), does not exceed the greater of (x) $50 95.0 million or and (y) 1035.0% of Total AssetsEBITDA for the Applicable Measurement Period at the time of incurrence; provided that such Indebtedness that exists at the date of such purchase, lease, construction, installation or improvement or is created within 365 days of the completion thereof incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding Indebtedness of the Issuer and the Restricted Subsidiaries;
(vi5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance, surety, appeal or similar bonds, completion guarantees or supporting indemnity, bid, warranty, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, howeverperformance or surety bonds, that upon the drawing of such letters of credit health, disability or the incurrence of such Indebtednessother employee benefits or property, such obligations are reimbursed within 30 days following such drawing casualty or incurrenceliability insurance or self-insurance;
(vii6) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earn-out or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, provided that (A) such Indebtedness is not reflected as Indebtedness on the balance sheet of the Company Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A6)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition);
(viii7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is made pursuant to an intercompany note and not a Guarantor is subordinated in right of payment to the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(ix) 8) Indebtedness of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from owing to a Restricted Subsidiary that is not the Issuer or a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further provided, further, that any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, deemed to be an incurrence of such Indebtedness not permitted by this clause (8);
(9) shares of preferred stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Issuer or another Restricted Subsidiary) shall be deemed in each case to be an incurrence issuance of such Indebtednessshares of preferred stock not permitted by this clause (9);
(x10) Hedging Obligations that are incurred (excluding Hedging Obligations entered into for speculative purposes);
(11) Indebtedness and obligations in respect of (x) self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Issuer or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business and (y) deferred compensation or other similar arrangements incurred by the Issuer or any of its Restricted Subsidiaries;
(A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms Indebtedness, Disqualified Stock and preferred stock of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company Issuer or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness an aggregate principal amount or liquidation preference up to 100% of the Company and net cash proceeds received by the Issuer since immediately after the Completion Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Foreign Subsidiaries Subsidiaries) as determined in accordance with clauses (C)(2) and (C)(3) of Section 1010(a) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 1010(b) or to make Permitted Investments (other than Permitted Investments specified in clause (1) of the definition thereof) and
(B) Indebtedness, Disqualified Stock or preferred stock of the Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (xiii12)(B), does not exceed $150 million at any one time outstanding; providedoutstanding exceed the greater of (x) $95.0 million and (y) 35.0% of EBITDA for the Applicable Measurement Period at the time of incurrence (it being understood that any Indebtedness, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and Disqualified Stock or preferred stock incurred pursuant to this clause (xiii12)(B) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(B) but shall be deemed incurred for the purposes of Section 1011(a) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under Section 1011(a) without reliance on this clause (12)(B), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding);
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries of Indebtedness Indebtedness, Disqualified Stock or preferred stock which serves to refundRefinance any Indebtedness, refinance Disqualified Stock or restructure any Indebtedness preferred stock incurred as permitted under paragraph (aSection 1011(a) and clauses (iii1), (2), (3) (4), 12(A), this clause (13) and clause (iv14) above, below or any Indebtedness Indebtedness, Disqualified Stock or preferred stock issued to so refundRefinance such Indebtedness, refinance Disqualified Stock or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") preferred stock prior to its respective maturitymaturity plus any Additional Refinancing Amount (the “Refinancing Indebtedness”); provided, however, provided that such Refinancing Indebtedness Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than (x) the remaining Weighted Average Life to Maturity of Indebtedness the Indebtedness, Disqualified Stock or preferred stock being refunded Refinanced or refinanced, (y) one year after the final stated maturity of the Notes;
(B) to the extent such Refinancing Indebtedness refinances Refinances (i) Indebtedness subordinated to the Notes or pari passu to any Guarantee of the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes or such Guarantee at least to the same extent as the Indebtedness being refinanced Refinanced or refunded and (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively;
(C) shall not include (x) Indebtedness Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that refinances Indebtedness of the Company Issuer that is not a Guarantor that Refinances Indebtedness, Disqualified Stock or (y) Indebtedness preferred stock of the Company Issuer or a Guarantor; and
(D) shall not include Indebtedness, Disqualified Stock or preferred stock of a Restricted Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or preferred stock of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi14) Indebtedness or Indebtedness, Disqualified Stock or preferred stock of (x) the Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged into or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either merger or consolidation, either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries is (x) at least 2.00 to 1.00 or (y) equal to or greater than the Fixed Charge Coverage Ratio of the Issuer and the Restricted Subsidiaries immediately prior to such acquisition., merger or consolidation, or
(B) the Consolidated Total Debt Ratio of the Issuer and the Restricted Subsidiaries is (x) no greater than 6.00 to 1.00 or (y) equal to or less than the Consolidated Total Debt Ratio of the Issuer and the Restricted Subsidiaries immediately prior to such acquisition, merger or consolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(16) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as, in the case of a guarantee by a Restricted Subsidiary that is not a Guarantor, such Indebtedness could have been incurred directly by the Restricted Subsidiary providing such guarantee, or
Appears in 1 contract
Samples: Indenture (Aar Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Each of Sweetheart Holdings and the Issuer will not, and will not permit any of its Restricted their Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness or issue any Disqualified Stock, and Sweetheart Holdings will not permit any of its Subsidiaries (including Acquired Indebtednessthe Issuer) to issue any preferred stock (except for preferred stock issued to the Issuer, Sweetheart Holdings or any shares Subsidiary of Disqualified Stock; providedthe Issuer or Sweetheart Holdings), howeverexcept that Sweetheart Holdings, the Issuer and any of their Subsidiaries that the Company is a Guarantor may incur Indebtedness or issue shares of Disqualified Stock if the if, (i) after giving effect thereto, Sweetheart Holdings' Pro Forma Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred shall be greater than 2.0 to 1; and (ii) no Default or Event of such incurrence Default shall have occurred and be continuing (which has not been waived) or would have been at least 1.75 occur as a consequence thereof; provided that no Guarantee may be incurred pursuant to 1.00 determined on a pro forma basis (including a pro forma application the provisions of this paragraph, unless the net proceeds therefrom), as if the additional guaranteed Indebtedness had been is also incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) pursuant to this paragraph. The foregoing limitations will not apply to:
(i) to the incurrence of (a) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of Indebtedness their Subsidiaries that is a Guarantor under or in respect of the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have Agreement in a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant incurrence not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or 65% of inventory plus 85% of accounts receivables of Sweetheart Holdings and its Subsidiaries (in each case as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, accounts receivable owned by a Receivables Subsidiary and inventory and accounts receivable of Lily Canada), and (y) 10% $215.0 million, reduced, in the case of Total Assets;
clause (viy), by the amount of the proceeds of any Asset Sales (including a Designated Asset Sale and Asset Sales to a Receivables Subsidiary) applied to (A) the repayment of principal of term loans thereunder (but only if such loans are outstanding pursuant to this clause (a) and not clause (e) of this covenant) and (B) the permanent reduction to the revolving loan commitments thereunder (but only to the extent revolving loan commitments so reduced relate to Indebtedness outstanding pursuant to this clause (a) and not clause (e) of this covenant); (b) Indebtedness in respect of the Securities and Existing Indebtedness; (c) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of its Restricted their Subsidiaries constituting reimbursement obligations with respect to letters of credit that is a Guarantor and issued in exchange for or the ordinary course proceeds of businesswhich are used to extend, including without limitation letters refinance, renew, replace, substitute or refund Indebtedness referred to in the immediately preceding paragraph or clause (b) above, and Indebtedness of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsSubsidiaries contemplated by clause (k) below (the "Refinancing Indebtedness"); provided, however, that upon (i) the drawing principal amount of such letters Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded (plus the amount of reasonable expenses incurred thereunder) (the "Refinanced Indebtedness"), (ii) the Refinancing Indebtedness shall rank pari passu with or junior to the Refinanced Indebtedness in right of payment and such Refinancing Indebtedness shall not permit payment prior to the stated maturity thereof earlier or in circumstances other than the Refinanced Indebtedness and (iii) the Weighted Average Life to Maturity of such Refinancing Indebtedness shall be no shorter than the Weighted Average Life to Maturity of the Refinanced Indebtedness; and provided, further, that in no event may Indebtedness of the Issuer or Sweetheart Holdings that is pari passu with, or subordinated in right of payment to, the Securities be exchanged, refinanced or refunded by means of Indebtedness of any Subsidiary of Sweetheart Holdings (other than the Issuer) pursuant to this clause (c); (d) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries in connection with any Hedging Obligations, performance bonds, letter of credit obligations and bank overdrafts incurred in the ordinary course of business or relating to (as determined in good faith by the incurrence Board of Directors of Sweetheart Holdings) or required by the terms of any Indebtedness permitted to be incurred pursuant to this Section 4.09; (e) additional Indebtedness of the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor (which Indebtedness may, but need not, be incurred under the Credit Agreement) including capital lease obligations and Purchase Money Obligations, in an aggregate principal amount not to exceed $25.0 million at any one time outstanding, reduced by the principal amount of any such Indebtedness, Indebtedness repaid with Net Proceeds of Asset Sales (other than Purchase Money Obligations repaid with the Net Proceeds of Asset Sales of the assets securing such obligations are reimbursed within 30 days following such drawing or incurrence;
Obligations) to the extent no reduction is made pursuant to clause (viia) above; (f) Indebtedness of Lily Canada incurred under the Lily Canada Loan Agreement not to exceed the greater of (1) 65% of inventory plus 85% of accounts receivables of Lily Canada and (2) Cn. $30.0 million at any time outstanding, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Lily Canada and its assets); (g) Indebtedness of Global in an amount not to exceed 65% of inventory plus 85% of accounts receivables of Global, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Global and its assets); (h) Indebtedness between or among Sweetheart Holdings, the Issuer and their Subsidiaries; (i) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries and arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any Obligations of Sweetheart Holdings, the Issuer or any of their Subsidiaries pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Sweetheart Holdings or the Issuer, other than guarantees Guarantees of Indebtedness incurred by any Person person acquiring all or any portion of such business, assets or a Subsidiary of Sweetheart Holdings or the Issuer for the purpose of financing such acquisition, in a principal amount not to exceed 25% of the gross proceeds (with proceeds other than cash or Cash Equivalents being valued at the fair market value thereof as determined by the Board of Directors of Sweetheart Holdings in good faith) actually received by Sweetheart Holdings, the Issuer or any of their Subsidiaries in connection with such dispositions, (j) Indebtedness of Sweetheart Holdings or the Issuer in an aggregate principal amount not to exceed $4.0 million at any one time outstanding incurred in connection with the purchase, redemption, acquisition, cancellation or other retirement for value of shares of capital stock of Sweetheart Holdings, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any stock option plan, upon death, disability, retirement, termination of employment or pursuant to the terms of such stock option plan or any other agreement under which such shares of capital stock, options, related rights or similar securities were issued; provided, however, provided that (A) such Indebtedness is not reflected on the balance sheet of the Company indebtedness, by its terms or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness terms of the Company any agreement or instrument pursuant to a Restricted Subsidiary; provided that any which such Indebtedness is issued, is expressly made pursuant subordinate in right of payment to an intercompany note and is the Securities at least to the extent that the Fonda Notes are subordinated in right of payment to the Notes; provided further that any subsequent issuance Securities, (X) xxch Indebtedness, by its terms or transfer by the terms of any Capital Stock agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by the Issuer or Sweetheart Holdings at any time prior to one year after the stated maturity of the Securities and (C) the scheduled maturity of all principal of such Indebtedness is at least one year after the stated maturity of the Securities; (k) Acquired Indebtedness in an aggregate principal amount not to exceed $25.0 million at any one time outstanding (reduced by the amount of Acquired Indebtedness repaid with Net Proceeds of Asset Sales other than Asset Sales of any Subsidiary subject to such Acquired Indebtedness) that is without recourse to Sweetheart Holdings, the Issuer or any of their Subsidiaries or any of their respective assets (other event which results in than the Subsidiary acquired subject to such Acquired Indebtedness and its assets), and is not guaranteed by any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiaryperson; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment after giving pro forma effect to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedincurrence thereof, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to Sweetheart Holdings could incur at least $1.00 of additional Indebtedness under the first paragraph (a) or of this Section 4.09 and (B) that any Refinancing Indebtedness with respect thereto may not be incurred by any person other than the Fixed Charge Coverage Ratio Subsidiary that is greater the obligor on such Acquired Indebtedness; (l) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer, Sweetheart Holdings or any Subsidiary of either or any of their respective assets (other than immediately prior such Receivables Subsidiary and its assets), and is not guaranteed by any such person and (m) if and to the extent that the Issuer, Sweetheart Holdings and any of their Subsidiaries that are Guarantors are not then parties to any Credit Agreement, Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor under or in respect of a working capital facility in a principal amount outstanding, after giving effect to such acquisitionincurrence, not to exceed the maximum Indebtedness that could then be incurred in accordance with clause (a)(x) above. Notwithstanding any other provision of this Section 4.09, a Guarantee of Indebtedness permitted by the terms of this Indenture at the time such Indebtedness was incurred will not constitute a separate incurrence of Indebtedness.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "“incur" ” and collectively, an "“incurrence" of”) any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock if the Fixed Charge Coverage Ratio for the Company Company’s and its Restricted Subsidiaries for the Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 1.75 2.00 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors of the Notes shall not exceed $100.0 million at any one time outstanding.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' ’ acceptances thereunder (with letters of credit and bankers' ’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 815.0 million outstanding at any one time; provided that Indebtedness incurred by Restricted Subsidiaries (other than Guarantors) pursuant to this clause (i) may not exceed $200.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company and any Guarantor of Indebtedness represented by the Notes issued on the Issuance DateDate (including any Guarantee) (other than any Additional Notes);
(iviii) (x) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 115.0 million or and (y) 10% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash non-cash proceeds (the fair market value of such noncash non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ixviii) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from to a Restricted Subsidiary that is not a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) but in any event excluding Hedging Obligations entered into for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesspeculative purposes);
(xi) obligations in respect of performance performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's ’s Guarantee;
(xiii) Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness outstanding exceed the sum of Foreign (x) $150.0 million and (y) 100% of the net cash proceeds received by the Company since immediately after the Issuance Date from the issue or sale of Equity Interests of the Company or net cash proceeds contributed to the capital of the Company (in each case other than Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries, which when aggregated ) as determined in accordance with clauses (ii) and (iii) of paragraph (b) of Section 1009 to the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred extent such net cash proceeds have not been applied pursuant to such clauses to make Restricted Payments or to make other investments, payments or exchanges pursuant to the paragraph (b) of Section 1009 or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) thereof) (it being understood that any Indebtedness, Disqualified Stock and preferred stock incurred under this clause (xiii) shall cease to be deemed incurred or outstanding for purposes of this clause (xiii) but shall be deemed to be incurred for purposes of paragraph (a) of this Section 1010 from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under paragraph (a) of this Section 1010 without reliance upon this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding);
(xiv) (A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded guarantee by a Restricted Subsidiary of Indebtedness of the Company, provided that such Guarantee (as defined is incurred in accordance with paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness Indebtedness, Disqualified Stock or preferred stock which serves to refund, refinance or restructure any Indebtedness Indebtedness, Disqualified Stock or preferred stock incurred as permitted under paragraph (a) and clauses (iiiii) and (iviii), this clause (xv) aboveand clause (xvi) below of this paragraph (b) of Section 1010, or any Indebtedness Indebtedness, Disqualified Stock or preferred stock issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums and fees in connection therewith (the "“Refinancing Indebtedness"”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness Indebtedness, Disqualified Stock or preferred stock being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances (x) Indebtedness subordinated or pari passu to the Notes or any Guarantee of the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes or any Guarantee of the Notes at least to the same extent as the Indebtedness being refinanced or refunded or (y) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (C) shall not include (x) Indebtedness Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company or Company, (y) Indebtedness Indebtedness, Disqualified Stock or preferred stock of a Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of a Guarantor or (z) Indebtedness, Disqualified Stock or preferred stock of the Company or a Restricted Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or preferred stock of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock or preferred stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Indebtedness, Disqualified Stock or preferred stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisitionacquisition or merger, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionacquisition or merger;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within two Business Days of its incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(1) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of the Indenture, or
(2) any guarantee by a Restricted Subsidiary of Indebtedness of the Company, provided that such guarantee is incurred in accordance with Section 1014. For purposes of determining compliance with this Section, in the event that an item of Indebtedness, Disqualified Stock or preferred stock meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or preferred stock described in clauses (i) through (xix) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify or reclassify such item of Indebtedness, Disqualified Stock or preferred stock and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or preferred stock in one of the above clauses; provided that all Indebtedness outstanding under the Credit Facilities after the application of the net proceeds from the sale of the Notes will be treated as incurred on the Issuance Date under paragraph (a) of this Section 1010. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness, Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or preferred stock for purposes of this Section. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing 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 refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Samples: Indenture (Accuride Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company Issuer and its the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction1.00; provided, howeverfurther, that the amount of Indebtedness outstanding (including Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any amounts incurred under clause (i14)(x) above and this clause (iiof Section 1011(b) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does that are not Guarantors shall not exceed the greater of (x) $50 200.0 million or and (y) 1050% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary EBITDA for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million Applicable Measurement Period at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (BWX Technologies, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise, (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided, however, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company and its the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis 1.00; provided, further, that the amount of Indebtedness (including a pro forma application of the net proceeds therefromother than Acquired Indebtedness), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issuedand preferred stock that may be incurred pursuant to the foregoing, as together with any amounts incurred under clause 14(x) of Section 1011(b) by Restricted Subsidiaries that are not Guarantors shall not exceed the case may begreater of (x) $100.0 million and (y) 10% of Total Assets, and the application of proceeds had occurred at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) (x) Indebtedness incurred pursuant to the incurrence Revolving Credit Facility by the Company of Indebtedness under or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of all Indebtedness incurred under this clause (x) does not exceed the greater of (A) $550 225.0 million and (B) the Borrowing Base, and (y) Indebtedness incurred pursuant to any Term Loan Facility by the Company or any Restricted Subsidiary; provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (y) and then outstanding at any one timedoes not exceed $670.0 million;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes (including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto) and Exchange Notes issued on the Issuance Datein respect of such Notes and any Guarantee thereof;
(iv3) Existing Indebtedness (other than Indebtedness described in clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation or improvement of property (real or personal) or equipment (that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets and Indebtedness arising from the conversion of the obligations of the Company or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Company or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v4) (together with any and all Refinancing Indebtedness with respect theretoincurred to Refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), does not exceed the greater of (x) $50 25.0 million or and (y) 102.5% of Total AssetsAssets at the time of incurrence, so long as such Indebtedness exists at the time of such purchase, lease, construction, installation or improvement or is created within 270 days thereafter;
(vi5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, however, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii6) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, provided that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will sheet) shall not be deemed to be reflected on such balance sheet for purposes of this clause (A6)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition);
(viii7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is made pursuant to an intercompany note and not a Guarantor is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessIndebtedness not permitted by this clause;
(ix) 8) Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Subsidiary Guarantor incurs such Indebtedness from owing to a Restricted Subsidiary that is not a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessIndebtedness not permitted by this clause;
(x9) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(10) Hedging Obligations that are incurred in the ordinary course of business (Aexcluding Hedging Obligations entered into for speculative purposes) for the purpose of fixing or hedging limiting interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency incurred pursuant to this Section 1011, exchange rate risk with respect to any currency exchangesor commodity pricing risk;
(xi11) obligations in respect of performance self insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(xii12) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness Indebtedness, Disqualified Stock or preferred stock of the Company and or any of its Foreign Subsidiaries Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (xiii12), does not exceed $150 million at any one time outstanding; providedoutstanding exceed the greater of $50.0 million and 5.0% of Total Assets at the time of incurrence (it being understood that any Indebtedness, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and Disqualified Stock or preferred stock issued or incurred pursuant to this clause (xiii12) shall cease to be deemed incurred or outstanding for purposes of this clause (12) but shall be deemed incurred for the purposes of Section 1011(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness or issued such Disqualified Stock or preferred stock under Section 1011(a) without reliance on this clause (12), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding);
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv13) the incurrence or issuance by the Company or any Restricted Subsidiary of its Restricted Subsidiaries of Indebtedness Indebtedness, Disqualified Stock or preferred stock which serves to refundRefinance any Indebtedness, refinance Disqualified Stock or restructure preferred stock of the Company or any Indebtedness Restricted Subsidiary incurred as permitted under paragraph (aSection 1011(a) and clauses (iii2) and (iv3) above, this clause (13) and clause (14) below or any Indebtedness Indebtedness, Disqualified Stock or preferred stock issued to so refundRefinance such Indebtedness, refinance Disqualified Stock or restructure such Indebtedness preferred stock including additional Indebtedness Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the "“Refinancing Indebtedness"”) on or prior to its respective maturity; provided, however, provided that such Refinancing Indebtedness Indebtedness
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness the Indebtedness, Disqualified Stock or preferred stock being refunded or refinanced, Refinanced,
(B) to the extent such Refinancing Indebtedness refinances Refinances (i) Indebtedness subordinated to the Notes or pari passu to any Guarantee of the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes or such Guarantee at least to the same extent as the Indebtedness being refinanced Refinanced or refunded and (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively and
(C) shall not include (x) Indebtedness Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of the Company that refinances Indebtedness is not a Guarantor that Refinances Indebtedness, Disqualified Stock or preferred stock of the Company or a Guarantor; and provided further that subclause (yA) above of this clause (13) shall not apply to any refunding or Refinancing of any Secured Indebtedness outstanding;
(14) (x) Indebtedness, Disqualified Stock or preferred stock of the Company or a Restricted Subsidiary incurred or issued to finance an acquisition; provided that refinances Indebtedness the amount of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or , Disqualified Stock and preferred stock that may be incurred by Restricted Subsidiaries that are not Guarantors pursuant to the foregoing together with any amounts incurred under Section 1011(a) (by Restricted Subsidiaries that are not Guarantors, shall not exceed $100.0 million at any one time outstanding, or (y) Acquired Indebtedness, Disqualified Stock or preferred stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness in the case of each of clause (x) or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that (y), after giving effect to such acquisitionacquisition or merger, either either:
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1011(a), or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is greater than immediately prior to such acquisition., merger or consolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within eight Business Days of its incurrence;
(16) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit issued pursuant to any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Samples: Indenture (Affinia Group Intermediate Holdings Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise in any manner become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness (including Acquired Indebtedness) ), other than Permitted Indebtedness, or issue any shares of Disqualified Stock; provided, however, except that the Company or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for of the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been equal to at least 1.75 2.0 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, 1.0. For so long as the case may beSafety-Kleen Services Indenture is in effect, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations Company will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company permit Safety Kleen Services or any Restricted Subsidiary of Safety Kleen Services to incur any Indebtedness (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (Aincluding Acquired Indebtedness)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to , other than Permitted Indebtedness, or issue any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided Disqualified Stock, except that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance Safety-Kleen Services or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary may incur Indebtedness or any other subsequent transfer of any such Indebtedness (except to issue Disqualified Stock if, at the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence time of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to incurrence or issuance, the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) Safety-Kleen Services Fixed Charge Coverage Ratio for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or four full fiscal quarters (Btaken as one accounting period) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as immediately preceding the incurrence of such Indebtedness incurred by or the issuance of such Restricted Subsidiary Disqualified Stock for which internal financial statements are available would have been equal to at least 2.0 to 1.0 if such incurrence is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company on or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; providedMay 29, however, that such Refinancing Indebtedness (A) has a Weighted Average Life 2000 and 2.25 to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition1.0 if thereafter.
Appears in 1 contract
Samples: Indenture (Safety Kleen Corp/)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of) after the date of the Indenture any Indebtedness (including Acquired IndebtednessDebt) or and that the Company will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stockpreferred stock; provided, however, that the Company may incur Indebtedness or (including Acquired Debt) and the Company may issue shares of Disqualified Stock if (i) no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof and (ii) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 2.5 to 1.00 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) . Indebtedness consisting of reimbursement obligations in respect of a letter of credit will be deemed to be incurred when the letter of credit is first issued. The Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness other than Non-Recourse Debt. The foregoing limitations provisions will not apply to:
(i) the incurrence by the Company of Indebtedness Senior Debt under the Senior New Credit Facility Facility, and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to Guarantees thereof by its Restricted Subsidiaries, in an aggregate principal amount of $550 million outstanding at any one timetime outstanding not to exceed an amount equal to $85 million less the aggregate amount of all mandatory payments applied to repay loans (other than revolving credit loans) outstanding thereunder or to permanently reduce the revolving credit commitments thereunder;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateSecurities;
(iii) Existing Indebtedness;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred the incurrence by the Company or any of its Restricted Subsidiaries to finance the purchaseof Permitted Refinancing Indebtedness in exchange for, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock net proceeds of any Person owning such assets) in an aggregate principal amount whichwhich are used to extend, when aggregated with refinance, renew, replace, defease or refund, Indebtedness that was permitted by the principal amount of all other Indebtedness then outstanding and Indenture to be incurred pursuant to this clause (including, without limitation, Existing Indebtedness);
(v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred incurrence by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in intercompany Indebtedness between or among the ordinary course Company and any of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, its Restricted Subsidiaries; provided that upon either (a) the transfer or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of disposition by the Company or a Restricted Subsidiary of any Indebtedness so permitted under this clause (v) to a Person other than the Company or a Restricted Subsidiary or (b) the issuance, sale, transfer or other disposition of Equity Interests (including by consolidation or merger) in a Restricted Subsidiary to a Person other than the Company or a Restricted Subsidiary which results in such Restricted Subsidiary ceasing to be a Restricted Subsidiary, the provisions of this clause (v) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations or Guarantees thereof, provided that such Hedging Obligations are incurred for the purpose of (A) fixing or hedging interest rate or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by the Indenture to be outstanding or any receivable or liability, the payment of which receivable or liability is determined by reference to a foreign currency; provided that the notional principal amount of any such Hedging Obligation does not exceed the principal amount of the Indebtedness to which such Hedging Obligation relates or (B) fixing or hedging risk with respect to fluctuations in the cost of its raw materials; provided that such obligation is entered into by the Company or a Restricted Subsidiary for valid business purposes other than speculative purposes (as determined by the Company's or such Restricted Subsidiary's chief financial officer in the exercise of his or her good faith business judgment);
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by performance bonds, bankers' acceptances, standby letters of credit, mechanic's xxxx xxxxx or appeal bonds, in each case to the extent incurred in the ordinary course of business of the Company or such Restricted Subsidiary;
(viii) the issuance by any of the Company's Restricted Subsidiaries of shares of preferred stock to the Company or a Restricted Subsidiary; provided that upon the transfer or other disposition by the Company or a Restricted Subsidiary of any such shares to a Person other than the Company or a Restricted Subsidiary, the provisions of this clause (viii) shall no longer be applicable to such preferred stock and such preferred stock shall be deemed to have been issued to such Person at the time of any such transfer or other disposition and shall be required to satisfy the provisions of clause (ix) hereof;
(ix) the incurrence by any Restricted Subsidiary of Indebtedness, or the issuance by any Restricted Subsidiary of preferred stock, the aggregate principal amount of which, in the case of Indebtedness, or the total liquidation preference of which, in the case of preferred stock, together with (x) all other Indebtedness of the Company's Restricted Subsidiaries (other than Guarantees of the New Credit Facility) at the time outstanding and (y) the total liquidation preference of all other preferred stock of the Company's Restricted Subsidiaries at the time issued and outstanding and, in each case, held by any Person other than the Company or any Restricted Subsidiary, does not exceed the greater of (1) 5% of the Company's Stockholders' Equity as of the date of incurrence or (2) $2 million; provided that, in the case of clause (1) only, the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness (including Acquired Subsidiary Debt) is incurred would have been at least 2.5 to 1, determined on a pro forma basis, provided further, that solely for the purpose of determining whether the aggregate principal amount of Indebtedness of the Company's Restricted Subsidiaries at any time outstanding exceeds 5% of the Company's Stockholders' Equity, Acquired Subsidiary Debt shall be excluded;
(x) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in each case, case incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, Restricted Subsidiary (other than guarantees Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided), however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote principal amount not to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;connection with such disposition; and
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xvxi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves (in addition to refund, refinance or restructure Indebtedness permitted by any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) other clause of this clause (xvparagraph) will in an aggregate principal amount at any time outstanding not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least exceed $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition10 million.
Appears in 1 contract
Samples: Indenture (Republic Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, assume or directly or indirectly guarantee or otherwise in any other manner become directly or indirectly liable with respect to for (collectively, "“incur" and collectively, an "incurrence" of”) any Indebtedness (including Acquired IndebtednessDebt) or issue any shares Disqualified Stock if, at the time of and immediately after giving pro forma effect to such incurrence of Indebtedness or issuance of Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue shares Debt to Operating Cash Flow Ratio of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter periodis more than 7.0:1.
(b) The foregoing limitations Section 4.07(a) will not apply to:to the incurrence of any of the following (collectively, “Permitted Indebtedness”):
(i) the incurrence by the Company of Indebtedness Senior Bank Debt arising under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one timeAgreement;
(ii) Indebtedness of any Real Estate Financing Transaction; provided, however, that Restricted Subsidiary consisting of a guarantee of the amount of Indebtedness outstanding Company’s Senior Bank Debt under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstandingCredit Agreement;
(iii) the incurrence by Indebtedness of the Company of Indebtedness represented by the Notes issued on the Issuance Dateand Indebtedness of any Subsidiary Guarantor represented by a Subsidiary Guarantee;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii))of the Company represented by the Series B Notes;
(v) Indebtedness (including Capitalized Lease Obligations) incurred owed by any Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, or owed by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Wholly Owned Restricted Subsidiary; provided that any such Indebtedness shall be at all times held by a Person which is made pursuant to an intercompany note and is subordinated in right of payment to either the Notes; provided further that any subsequent issuance Company or transfer of any Capital Stock or any other event which results in any such a Wholly Owned Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company; and provided, further, that upon either (a) the transfer or any other subsequent transfer disposition of any such Indebtedness (except to a Person other than the Company or another Wholly Owned Restricted Subsidiary or (b) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of any such Wholly Owned Restricted Subsidiary to a Person other than the Company or another Wholly Owned Restricted Subsidiary) , the incurrence of such Indebtedness shall be deemed, in each case deemed to be an incurrence of such Indebtednessthat is not permitted by this clause (v);
(ixvi) Indebtedness guarantees of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated are made in right accordance with the provisions of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such IndebtednessSection 4.15;
(xvii) Hedging Indebtedness arising with respect to Interest Rate Agreement Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesoutstanding;
(xiviii) obligations Purchase Money Indebtedness and Capital Lease Obligations which do not exceed, as determined in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary accordance with GAAP, $10,000,000 in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(Aix) any guarantee by the Company Indebtedness of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any Restricted Subsidiary outstanding on the Issue Date (including, without limitation, any Indebtedness of its the Company represented by the 8½% senior notes due 2008 originally issued on the Issue Date and any Indebtedness of any Restricted Subsidiaries Subsidiary represented by a guarantee of Indebtedness which serves to refund, refinance or restructure such Indebtedness);
(x) any Indebtedness incurred as permitted in connection with or given in exchange for the renewal, extension, substitution, refunding, defeasance, refinancing or replacement of any Indebtedness described in clauses (iii), (iv) and (ix) above or incurred under paragraph the Debt to Operating Cash Flow Ratio pursuant to Section 4.07(a) (“Refinancing Indebtedness”); provided that (a) and clauses the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of the Indebtedness so renewed, extended, substituted, refunded, defeased, refinanced or replaced (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay plus the premiums and fees paid in connection therewith (which shall not exceed the "Refinancing Indebtedness"stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced) prior and the expenses incurred in connection therewith); (b) with respect to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has of any Indebtedness other than Senior Debt, the Refinancing Indebtedness shall have a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less equal to or greater than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded renewed, extended, substituted, refunded, defeased, refinanced or refinanced, replaced; and (Bc) with respect to the extent such Refinancing Indebtedness refinances of Indebtedness subordinated or pari passu to other than Senior Debt incurred by (1) the NotesCompany, such Refinancing Indebtedness is subordinated or pari passu shall rank no more senior, and shall be at least as subordinated, in right of payment to the Notes at least to the same extent as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or refunded replaced, and (C2) shall not include (x) Indebtedness of a Subsidiary that refinances Guarantor, such Refinancing Indebtedness shall rank no more senior, and shall be at least as subordinated, in right of payment to the Company Subsidiary Guarantee as the Indebtedness being renewed, extended, substituted, refunded, defeased, refinanced or replaced; and
(yxi) Indebtedness of the Company in addition to that described in clauses (i) through (x) above, and any renewals, extensions, substitutions, refinancings or a Restricted Subsidiary that refinances replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of incurred pursuant to this clause (xvxi) will does not apply exceed $15,000,000 at any one time outstanding. For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xi) above or is entitled to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by be incurred pursuant to Section 4.07(a), the Company or shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.07 and such item of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not shall be treated as having been incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionas so classified.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (ai) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" and collectively, an "incurrence" of") any Indebtedness (including Acquired Indebtedness), (ii) or the Company and any Guarantor will not issue any shares of Disqualified StockStock and (iii) the Company will not permit any of its Restricted Subsidiaries that are not Guarantors (other than CapCo I) to issue any shares of preferred stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company's and its the Restricted Subsidiaries for the Subsidiaries' most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.00 (determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) ). The foregoing limitations will not apply to:
: (ia) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior New Credit Facility and the issuance and creation of letters of credit and bankers' banker's acceptances thereunder (with letters of credit and bankers' banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 650 million outstanding at any one time;
; (ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iiib) the incurrence by the Company Issuers of Indebtedness represented by the Notes issued Securities in an aggregate principal amount not to exceed $225,000,000; (c) Indebtedness existing on the Issuance Date;
(iv) Existing Indebtedness Issue Date (other than Indebtedness described in clauses (ia) and (iiib));
; (vd) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (vd) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (d), does not exceed the greater of (x) $50 million or (y) 1015% of Total Assets;
Assets at the time of the respective incurrence; (vie) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viif) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiig) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is shall be subordinated in right of payment to the NotesSecurities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case case, to be an incurrence of such Indebtedness;
; (ixh) Indebtedness shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent issuance or transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;any
(xj) Hedging Obligations that are incurred in the ordinary course of business (A1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or outstanding; (B2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;the
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(Ai) any guarantee by the Company or by any Restricted Subsidiary that is a Guarantor of Indebtedness or other obligations of the Company or any of its the Company's Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary or the Company, as the case may be, is permitted under the terms of this the Senior Subordinated Indenture and (Bii) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
; (xvo) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under the first paragraph of this covenant, this clause (ao) and clauses (iiib) and (ivc) aboveabove and (q) below, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (Ai) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced, (Bii) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the NotesSecurities, such Refinancing Indebtedness is subordinated or pari passu to the Notes Securities at least to the same extent as the Indebtedness being refinanced or refunded and (Ciii) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Guarantor that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further provided, further, that subclauses (Ai) and (Bii) of this clause (xvo) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvip) other Indebtedness in an amount not greater than twice the amount of Permanent Qualified Equity Contributions after the Issue Date at any one time outstanding; and (q) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred acquired in contemplation of such acquisition or merger; and provided further provided, further, that after giving effect to such acquisition, either (Ai) the Company would be permitted to incur at least $1.00 1.0 of additional Indebtedness under paragraph (a) pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant or (Bii) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (q) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Parent shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and Parent shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Parent may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of Parent and the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application 1.00; provided, further, that the amount of the net proceeds therefrom)Indebtedness, as if the additional Indebtedness had been incurred or the Disqualified Stock had been issuedand preferred stock that may be incurred pursuant to the foregoing, as together with any amounts incurred under Section 4.07(b)(14)(x) by Restricted Subsidiaries that are not the case may be, Issuer or Guarantors shall not exceed the greater of (x) $75 million and the application (y) 1.75% of proceeds had occurred Consolidated Total Assets at the beginning of such four-quarter periodany one time outstanding.
(b) The foregoing limitations will shall not apply to:
(i1) Indebtedness incurred pursuant to Credit Facilities by Parent or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of $550 million outstanding all Indebtedness incurred under this clause (1) does not exceed at any one timetime $1,400 million;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date(including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iv3) Existing Indebtedness (other than Indebtedness described in clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Parent or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets, and all Refinancing Indebtedness (having the meaning set forth in clause (13) below) incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 75.0 million or and (y) 101.75% of Consolidated Total AssetsAssets at the time of incurrence; provided that such Indebtedness (other than Refinancing Indebtedness) exists at the date of such purchase, lease, construction, installation, repair, replacement or improvement or is created prior to or within 270 days of the completion thereof; provided, further that Capitalized Lease Obligations incurred by Parent or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by Parent or such Restricted Subsidiary to permanently repay outstanding Indebtedness of Parent or the Restricted Subsidiaries;
(vi5) (A) Indebtedness incurred by the Company Parent or any of its Restricted Subsidiaries constituting reimbursement obligations Subsidiary with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practices, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement or indemnification obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other reimbursement-type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Each of Sweetheart Holdings and the Issuer will not, and will not permit any of its Restricted their Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness or issue any Disqualified Stock, and Sweetheart Holdings will not permit any of its Subsidiaries (including Acquired Indebtednessthe Issuer) to issue any preferred stock (except for preferred stock issued to the Issuer, Sweetheart Holdings or any shares Subsidiary of Disqualified Stock; providedthe Issuer or Sweetheart Holdings), howeverexcept that Sweetheart Holdings, the Issuer and any of their Subsidiaries that the Company is a Guarantor may incur Indebtedness or issue shares of Disqualified Stock if the if, (i) after giving effect thereto, Sweetheart Holding's Pro Forma Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred shall be greater than 2.0 to 1; and (ii) no Default or Event of such incurrence Default shall have occurred and be continuing (which has not been waived) or would have been at least 1.75 occur as a consequence thereof; provided that no Guarantee may be incurred pursuant to 1.00 determined on a pro forma basis (including a pro forma application the provisions of this paragraph, unless the net proceeds therefrom), as if the additional guaranteed Indebtedness had been is also incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) pursuant to this paragraph. The foregoing limitations will not apply to:
(i) to the incurrence of (a) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of Indebtedness their Subsidiaries that is a Guarantor under or in respect of the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have Agreement in a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant incurrence not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or 65% of inventory plus 85% of accounts receivables of Sweetheart Holdings and its Subsidiaries (in each case as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, accounts receivable owned by a Receivables Subsidiary and inventory and accounts receivable of Lily Canada), and (y) 10% $215.0 million, reduced, in the case of Total Assets;
clause (viy), by the amount of the proceeds of any Asset Sales (including a Designated Asset Sale and Asset Sales to a Receivables Subsidiary) applied to repay outstanding Indebtedness under the Credit Agreement; (b) Indebtedness in respect of the Securities and Existing Indebtedness; (c) Indebtedness incurred by the Company Issuer, Sweetheart Holdings or any of its Restricted their Subsidiaries constituting reimbursement obligations with respect to letters of credit that is a Guarantor and issued in exchange for or the ordinary course proceeds of businesswhich are used to extend, including without limitation letters refinance, renew, replace, substitute or refund Indebtedness referred to in the immediately preceding paragraph or clause (b) above, and Indebtedness of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claimsSubsidiaries contemplated by clause (k) below (the "Refinancing Indebtedness"); provided, however, that upon (i) the drawing principal amount of such letters Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted or refunded (plus the amount of reasonable expenses incurred thereunder) (the "Refinanced Indebtedness"), (ii) the Refinancing Indebtedness shall rank pari passu with or junior to the Refinanced Indebtedness in right of payment and such Refinancing Indebtedness shall not permit payment prior to the stated maturity thereof earlier or in circumstances other than the Refinanced Indebtedness and (iii) the Weighted Average Life to Maturity of such Refinancing Indebtedness shall be no shorter than the Weighted Average Life to Maturity of the Refinanced Indebtedness; and provided, further, that in no event may Indebtedness of the Issuer or Sweetheart Holdings that is pari passu with, or subordinated in right of payment to, the Securities be exchanged, refinanced or refunded by means of Indebtedness of any Subsidiary of Sweetheart Holdings (other than the Issuer) pursuant to this clause (c); (d) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries in connection with any Hedging Obligations, performance bonds, letter of credit obligations and bank overdrafts incurred in the ordinary course of business or relating to (as determined in good faith by the incurrence Board of Directors of Sweetheart Holdings) or required by the terms of any Indebtedness permitted to be incurred pursuant to this Section 4.09; (e) additional Indebtedness of the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor (which Indebtedness may, but need not, be incurred under the Credit Agreement), including capital lease obligations and Purchase Money Obligations, in an aggregate principal amount not to exceed $25.0 million at any one time outstanding, reduced by the principal amount of any such Indebtedness, Indebtedness repaid with Net Proceeds of Asset Sales (other than Purchase Money Obligations repaid with the Net Proceeds of Asset Sales of the assets securing such obligations are reimbursed within 30 days following such drawing or incurrence;
Obligations) to the extent no reduction is made pursuant to clause (viia) above; (f) Indebtedness of Lily Canada incurred under the Lily Canada Loan Agreement not to exceed the greater of (1) 65% of inventory plus 85% of accounts receivables of Lily Canada and (2) Cn. $30.0 million at any time outstanding, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Lily Canada and its assets); (g) Indebtedness of Global in an amount not to exceed 65% of inventory plus 85% of accounts receivables of Global, provided that such Indebtedness is without recourse to Sweetheart Holdings or any of its Subsidiaries or any of their respective assets (other than Global and its assets); (h) Indebtedness between or among Sweetheart Holdings, the Issuer and their Subsidiaries; (i) Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries and arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any Obligations of Sweetheart Holdings, the Issuer or any of their Subsidiaries pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Sweetheart Holdings or the Issuer, other than guarantees Guarantees of Indebtedness incurred by any Person person acquiring all or any portion of such business, assets or a Subsidiary of Sweetheart Holdings or the Issuer for the purpose of financing such acquisition, in a principal amount not to exceed 25% of the gross proceeds (with proceeds other than cash or Cash Equivalents being valued at the fair market value thereof as determined by the Board of Directors of Sweetheart Holdings in good faith) actually received by Sweetheart Holdings, the Issuer or any of their Subsidiaries in connection with such dispositions, (j) Indebtedness of Sweetheart Holdings or the Issuer in an aggregate principal amount not to exceed $4.0 million at any one time outstanding incurred in connection with the purchase, redemption, acquisition, cancellation or other retirement for value of shares of capital stock of Sweetheart Holdings, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) and which were issued pursuant to any stock option plan, upon death, disability, retirement, termination of employment or pursuant to the terms of such stock option plan or any other agreement under which such stares of capital stock, options, related rights or similar securities were issued; provided, however, provided that (A) such Indebtedness is not reflected on the balance sheet of the Company indebtedness, by its terms or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness terms of the Company any agreement or instrument pursuant to a Restricted Subsidiary; provided that any which such Indebtedness is issued, is expressly made pursuant subordinate in right of payment to an intercompany note and is the Securities at least to the extent that the Xxxxx Notes are subordinated in right of payment to the Notes; provided further that any subsequent issuance Securities, (B) such Indebtedness, by its terms or transfer by the terms of any Capital Stock agreement or instrument pursuant to which such Indebtedness is issued, provides that no payments of principal of such Indebtedness by way of sinking fund, mandatory redemption or otherwise (including defeasance) may be made by the Issuer or Sweetheart Holdings at any time prior to one year after the stated maturity of the Securities and (C) the scheduled maturity of all principal of such Indebtedness is at least one year after the stated maturity of the Securities; (k) Acquired Indebtedness in an aggregate principal amount not to exceed $25.0 million at any one time outstanding (reduced by the amount of Acquired Indebtedness repaid with Net Proceeds of Asset Sales other than Asset Sales of any Subsidiary subject to such Acquired Indebtedness) that is without recourse to Sweetheart Holdings, the Issuer or any of their Subsidiaries or any of their respective assets (other event which results in than the Subsidiary acquired subject to such Acquired Indebtedness and its assets), and is not guaranteed by any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiaryperson; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment after giving pro forma effect to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedincurrence thereof, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to Sweetheart Holdings could incur at least $1.00 of additional Indebtedness under the first paragraph (a) or of this Section 4.09 and (B) that any Refinancing Indebtedness with respect thereto may not be incurred by any person other than the Fixed Charge Coverage Ratio Subsidiary that is greater the obligor on such Acquired Indebtedness; (l) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer, Sweetheart Holdings or any Subsidiary of either or any of their respective assets (other than immediately prior such Receivables Subsidiary and its assets), and is not guaranteed by any such person and (m) if and to the extent that the Issuer, Sweetheart Holdings and any of their Subsidiaries that are Guarantors are not then parties to any Credit Agreement, Indebtedness incurred by the Issuer, Sweetheart Holdings or any of their Subsidiaries that is a Guarantor under or in respect of a working capital facility in a principal amount outstanding, after giving effect to such acquisitionincurrence, not to exceed the maximum Indebtedness that could then be incurred in accordance with clause (a)(x) above. Notwithstanding any other provision of this Section 4.09, a Guarantee of Indebtedness permitted by the terms of this Indenture at the time such Indebtedness was incurred will not constitute a separate incurrence of Indebtedness.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "incur" “Incur” and collectively, an "incurrence" of“Incurrence”) any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified StockStock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company Company’s and its the Restricted Subsidiaries for the Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 2.00 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will Section 1010(a) shall not apply to:
(i) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility Facilities and the issuance and creation of letters of credit and bankers' banker’s acceptances thereunder (with letters of credit and bankers' banker’s acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 650.0 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance DateNotes;
(iviii) the Existing Indebtedness (other than Indebtedness described in clauses (i) and (iiiii));
(viv) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (viv) (together with any and including all Refinancing Indebtedness with respect theretoincurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (iv), does not exceed the greater of (x) $50 50.0 million or (y) 1015% of Total Assets;
(viv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(viivi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viiivii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results will result in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an issuance of shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the this Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's ’s Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 150.0 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiariesa Restricted Subsidiary organized under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, which when aggregated with the principal amount of all other Indebtedness of Foreign such Restricted Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 60.0 million (or the equivalent thereof in any other currency) at any one time outstanding;
(xiv) (A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and Indenture, (B) any Excluded Guarantee (as defined in paragraph (a) of Section 10141014 hereof) of a Restricted SubsidiarySubsidiary and (C) any Guarantee by a Restricted Subsidiary so long as the Indebtedness being guaranteed was permitted to be incurred under this Section 1010 and such Restricted Subsidiary complies with Section 1014 hereof;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) of this Section 1010 and clauses (ii), (iii), (iv) and (ivxii) aboveor clause (xvi) of this paragraph (b), or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums premiums, expenses and fees in connection therewith (the "“Refinancing Indebtedness"”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or Indebtedness of a non-Guarantor that refinances Indebtedness of a Guarantor or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (athe provisions of Section 1010(a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionacquisition or merger; and
(xvii) guarantees by the Company or its Restricted Subsidiaries of the obligations of joint ventures of the Company or its Restricted Subsidiaries; provided that the maximum aggregate amount of all such guaranteed obligations shall at not time exceed $25 million. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xvii) above or is entitled to be incurred pursuant to paragraph (a) of this Section 1010, the Company shall, in its sole discretion, classify and may later reclassify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses or pursuant to paragraph (a) of this Section 1010. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this Section 1010.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Trust will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "“incur" and collectively”), an "incurrence" of) any Indebtedness (including Acquired Indebtedness except to the extent that it qualifies as Permitted Indebtedness pursuant to clause (i) of the definition thereof), other than Permitted Indebtedness) , or issue any shares of Disqualified Stock; provided, howeverother than Disqualified Stock issued in connection with a SIFT Reorganization, except that the Company Trust or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 1.75 greater than 2.5 to 1.00 determined on a 1.0. In making the foregoing calculation, pro forma basis effect will be given to:
(including a pro forma i) the incurrence of such Indebtedness and the application of the net proceeds therefrom)from the incurrence of Indebtedness, including to refinance other Indebtedness, since the first day of such four-quarter period as if the additional such Indebtedness had been was incurred or the Disqualified Stock had been issued, as the case may be, and the application of such proceeds had occurred at the beginning of such four-quarter period.
(b) The foregoing limitations will not apply to:
(i) the incurrence by the Company of Indebtedness under the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) the incurrence, repayment or retirement of any Real Estate Financing Transactionother Indebtedness by the Trust or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;and
(iii) the incurrence acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any other company, entity, business or assets acquired or disposed of by the Company Trust or any Restricted Subsidiary, as the case may be, since the first day of Indebtedness represented by such four-quarter period, as if such acquisition or disposition (including the Notes issued on incurrence, assumption or liability for any such Acquired Indebtedness) occurred at the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses beginning of such four-quarter period. In making a computation under the foregoing clause (i) and or (iii)ii):
(A) interest on Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months);
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to bears, at the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms option of the Indenture to Trust, a fixed or floating rate of interest, interest thereon will be outstanding or (B) for computed by applying, at the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness option of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amountTrust, which when aggregated with either the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (fixed or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtednessfloating rate; and
(xviC) the amount of any Indebtedness or Disqualified Stock under a revolving credit facility (including the Senior Secured Credit Facilities to the extent they constitute a revolving credit facility) will be computed based on the average daily balance of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of during such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionfour-quarter period.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable liable, contingently or otherwise, with respect to (collectively, "“incur" and collectively, an "incurrence" of”) any Indebtedness (including Acquired Indebtedness) or Debt), and the Company will not issue any shares of Disqualified Stock, the Company will not permit any Restricted Subsidiary to issue any Disqualified Stock and the Company will not permit any of its other Restricted Subsidiaries to issue any preferred securities; provided, however, that the Company Issuers and any Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock Stock, if the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of on which such incurrence additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.. The first paragraph of this Section 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(b) The foregoing limitations will not apply to:
(i1) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness under the Senior Credit Facility and the issuance and creation of (including letters of credit and bankers' acceptances thereunder credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereofmaximum potential liability of the Company and its Subsidiaries thereunder) up not to an aggregate principal amount exceed the greater of $550 325.0 million outstanding at any one timeand 15% of Consolidated Net Tangible Assets;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii2) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued and sold on the Initial Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) Date and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries related Subsidiary Guarantees to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit be issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms date of this Indenture and (B) the Exchange Notes and the related Subsidiary Guarantees issued pursuant to any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted SubsidiaryRegistration Rights Agreement;
(xv3) the existing aggregate principal amount $250.0 million 71/8 % senior notes due 2014 issued by the Issuers and any associated guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or restructure replace any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued pursuant to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will 4), not apply to exceed $30.0 million at any refunding or refinancing of any Senior Indebtedness; andtime outstanding;
(xvi5) Indebtedness or Disqualified Stock of Persons that are acquired the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or merged into the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clause (2) or (3) of this Section 4.09 or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Subsidiary Guarantee of such Guarantor; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary in accordance with of the terms Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is neither the Company, nor a Restricted Subsidiary of the Company, nor a creditor to secure Indebtedness incurred either pursuant to the first paragraph of this Indenture; provided that covenant or to secure Permitted Debt, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or Disqualified Stock is such Restricted Subsidiary, as the case may be, that was not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either permitted by this clause (A6).
(7) the incurrence by the Company would or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a merger or consolidation meeting any one of the financial tests set forth in clause (3) of Section 5.01;
(9) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed); and
(11) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, not to exceed the greater of $45.0 million and 3% of Consolidated Net Tangible Assets. For purposes of determining compliance with this Section 4.09, (a) in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (11) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to incur at least $1.00 classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09; and (b) Indebtedness outstanding in currencies other than US dollars shall be converted on the date of incurrence. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness under paragraph (a) with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisitionan issuance of Disqualified Stock for purposes of this Section 4.09.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company shall not issue any shares of Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of preferred stock or Disqualified Stock; provided, however, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness) or issue shares of preferred stock or Disqualified Stock if (any Indebtedness or Disqualified Stock incurred pursuant to this paragraph, “Ratio Indebtedness”) if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company and its the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period1.00.
(b) The foregoing limitations will shall not apply to:
(i1) the incurrence Indebtedness incurred pursuant to Credit Facilities by the Company or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the sum of Indebtedness under (x) the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of $550 million all Indebtedness incurred pursuant to this clause (1) (taken together with the principal amount of any outstanding Refinancing Indebtedness incurred pursuant to clause (13) below with respect to Indebtedness incurred pursuant to this clause (1)) and (y) the then-outstanding aggregate principal amount of all Indebtedness incurred pursuant to clause (2(a)) below (taken together with the principal amount of any outstanding Refinancing Indebtedness incurred pursuant to clause (13) below with respect to Indebtedness incurred pursuant to such clause (2)(a)) does not exceed at any one timetime the sum of (A) $1,158 million and (B) additional amounts if, immediately after giving effect to the incurrence of such additional amount (but without giving effect to any amount incurred simultaneously under the immediately preceding clause (A)) and the application of the proceeds therefrom, (1) in the case of any Credit Facilities that will be secured by the Collateral on a pari passu basis (but without regard to control of remedies) with the Notes Obligations, the First Lien Net Leverage Ratio, recomputed on a pro forma basis as of the last day of the most recently ended fiscal quarter giving effect to the incurrence of such Credit Facilities, is equal to or less than 2.00 to 1.00, (2) in the case of any Credit Facilities that will be secured by the Collateral on a junior basis to the Notes Obligations, the Secured Net Leverage Ratio, recomputed on a pro forma basis as of the last day of the most recently ended fiscal quarter giving effect to the incurrence of such Credit Facilities, is equal to or less than 3.00 to 1.00 or (3) in the case of any Credit Facilities that will be unsecured, the Total Net Leverage Ratio, recomputed on a pro forma basis as of the last day of the most recently ended fiscal quarter giving effect to the incurrence of such Credit Facilities, is equal to or less than 3.50 to 1.00;
(ii2) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by (a) the Notes issued (including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees thereof) and (b) the Convertible Notes (including any Guarantee thereof) outstanding on the Issuance Issue Date;
(iv3) Existing Indebtedness (other than Indebtedness described in incurred pursuant to clauses (i1) and (iii)2) of this paragraph);
(v4) Indebtedness (including Capitalized Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, installation, repair, replacement or improvement of property (real or personal) or equipment (whether that is used or useful in a Similar Business, including through the direct purchase of assets or the Capital Stock of any Person owning such assets) , and outstanding Refinancing Indebtedness incurred to Refinance any Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto4), does not exceed the greater of (x) $50 12.5 million or and (y) 102.5% of Total AssetsConsolidated EBITDA for the most recently ended Test Period at the time of incurrence;
(vi5) (A) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations Subsidiary with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practices, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement or indemnification obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other reimbursement-type obligations regarding workers' ’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Samples: Indenture (Gannett Co., Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise in any manner become directly or indirectly liable with respect to for the payment of, or otherwise incur (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness (including Acquired Indebtedness) ), other than Permitted Indebtedness, or issue any shares of Disqualified Stock; provided, however, except that the Company or a Restricted Subsidiary may incur Indebtedness or issue shares of Disqualified Stock if if, at the time of such incurrence or issuance, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters (taken as one accounting period) immediately preceding the incurrence of such Indebtedness or the issuance of such Disqualified Stock for which internal financial statements are available immediately preceding the date of such incurrence would have been equal to at least 1.75 2.0 to 1.00 determined 1.0 if such incurrence is on a or prior to the second anniversary of the Closing Date and 2.25 to 1.0 if thereafter. In making the foregoing calculation for any four-quarter period which includes the Closing Date, pro forma basis (including a pro forma effect shall be given to the Offering and the application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds such transactions had occurred at the beginning of such four-quarter period.
. In addition (b) The but without duplication), in making the foregoing limitations calculation, pro forma effect will not apply be given to:
: (i) the incurrence by of such Indebtedness and (if applicable) the Company application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness under the Senior Credit Facility was incurred and the issuance and creation application of letters such proceeds occurred at the beginning of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
such four-quarter period, (ii) the incurrence, repayment or retirement of any Real Estate Financing Transaction; provided, however, that the amount of other Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period, (iii) if the acquisition (whether by purchase, lease merger or improvement of property (real or personalotherwise) or equipment disposition (whether through the direct purchase of assets by sale, merger or the Capital Stock otherwise) of any Person owning such assets) in an aggregate principal amount whichother company, when aggregated with the principal amount entity or business acquired or disposed of all other Indebtedness then outstanding and incurred pursuant to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x) $50 million or (y) 10% of Total Assets;
(vi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in Subsidiary, as the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect case may be, since the first day of such Guarantor's Guarantee;
(xiii) Indebtedness four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this foregoing clause (xiiii) or (ii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) interest on Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the dated of computation had been the applicable rate for the entire period (taking into account any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of Hedging Obligations applicable to such Indebtedness incurred by if such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of Hedging Obligations have a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity remaining term at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity date of Indebtedness being refunded or refinanceddetermination in excess of 12 months), (B) to if such Indebtedness bears, at the extent such Refinancing Indebtedness refinances Indebtedness subordinated option of the Company, a fixed or pari passu to floating rate of interest, interest thereon will be computed by applying, at the Notesoption of the Company, such Refinancing Indebtedness is subordinated either the fixed or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded floating rate and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing amount of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Issuer shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to liable, contingently or otherwise (collectively, "“incur" ” and collectively, an "“incurrence" of”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified StockStock and shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not the Issuer or Guarantors, preferred stock; provided, however, provided that the Company Issuer may incur Indebtedness (including Acquired 82 Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock if and issue shares of preferred stock, if, after giving effect thereto, the Fixed Charge Coverage Ratio for of the Company Issuer and its the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been be at least 1.75 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period1.00.
(b) The foregoing limitations will shall not apply to:
(i1) the incurrence Indebtedness incurred pursuant to Credit Facilities by the Company of Indebtedness under Issuer or any Restricted Subsidiary; provided that immediately after giving effect to any such incurrence, the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) up to an then-outstanding aggregate principal amount of $550 million outstanding all Indebtedness incurred under this clause (1) does not exceed at any one time;
time (iix) any Real Estate Financing Transaction$1,700.0 million plus (y) an additional amount if, after giving pro forma effect to the incurrence of such additional amount and the application of net proceeds therefrom, the Consolidated Secured Debt Ratio is equal to or less than 3.50:1.00; provided, howeverfurther, that that, for purposes of determining the amount of Indebtedness outstanding that may be incurred under clause (i) above and 1)(y), all Indebtedness incurred under this clause (ii1) shall not in the aggregate exceed $550 million at any time outstandingbe treated as Secured Indebtedness;
(iii2) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date(including any Guarantee thereof, but excluding Indebtedness represented by Additional Notes, if any, or guarantees with respect thereto);
(iv3) Existing Indebtedness (other than Indebtedness described in incurred pursuant to clauses (i1) and (iii)2) above);
(v4) Indebtedness (including Capitalized Finance Lease Obligations) ), Disqualified Stock and preferred stock incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary, to finance the purchase, lease lease, construction, development, installation or improvement of property (real or personal) ), equipment or equipment (other fixed or capital assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets and Indebtedness arising from the conversion of the obligations of the Issuer or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount of all other Indebtedness Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (v) (together with any 4), and all Refinancing Indebtedness with respect theretoincurred to Refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), does not exceed the greater of (x) $50 150.0 million or and (y) 10% of Consolidated Total AssetsAssets at the time of incurrence; provided that such Indebtedness that exists at the date of such purchase, lease, construction, installation or improvement or is created within 365 days of the completion thereof incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Lease-Back Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Lease-Back Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding Indebtedness of the Issuer and the Restricted Subsidiaries;
(vi5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including without limitation letters of credit in respect of workers' ’ compensation claims claims, performance, surety, appeal or self-insurancesimilar bonds, completion guarantees or supporting indemnity, bid, warranty, health, disability or other employee benefits or property, casualty or liability insurance or self- insurance or other Indebtedness with respect to reimbursement type obligations regarding workers' ’ 83 compensation claims; provided, howeverperformance or surety bonds, that upon the drawing of such letters of credit health, disability or the incurrence of such Indebtednessother employee benefits or property, such obligations are reimbursed within 30 days following such drawing casualty or incurrenceliability insurance or self-insurance;
(vii6) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earn-out or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, provided that (A) such Indebtedness is not reflected as Indebtedness on the balance sheet of the Company Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A6)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition);
(viii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) Indebtedness of the Company and any of its Foreign Subsidiaries not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (xiii), does not exceed $150 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Each of Sweetheart Holdings and the Company will not, and will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to (collectively, "incur" and collectively"), an "incurrence" of) any Indebtedness or issue any Disqualified Stock, and Sweetheart Holdings will not permit any of its Restricted Subsidiaries (including Acquired Indebtednessthe Company) to issue any preferred stock (except for preferred stock issued to the Company, Sweetheart Holdings or any shares Restricted Subsidiary of Disqualified Stock; provided, however, that the Company or Sweetheart Holdings), except that Sweetheart Holdings, the Company and any of their Restricted Subsidiaries that is a Guarantor may incur Indebtedness or issue shares of Disqualified Stock if the if, (1) after giving effect thereto, Sweetheart Holdings' Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred shall be greater than 2.00 to 1.00; and (2) no Default or Event of such incurrence Default shall have occurred and be continuing (which has not been waived) or would have been at least 1.75 occur as a consequence thereof; provided that no Guarantee may be incurred pursuant to 1.00 determined on a pro forma basis (including a pro forma application the provisions of this paragraph, unless the net proceeds therefrom), as if the additional guaranteed Indebtedness had been is also incurred or the Disqualified Stock had been issued, as the case may be, and the application of proceeds had occurred at the beginning of such four-quarter period.
(b) pursuant to this paragraph. The foregoing limitations will not apply to:to the incurrence of (each of the following, collectively, "Permitted Debt"):
(ia) the incurrence Indebtedness incurred by the Company Company, Sweetheart Holdings or any of Indebtedness their Restricted Subsidiaries that is a Guarantor under or in respect of the Senior Credit Facility and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have Agreement in a principal amount equal to the face amount thereof) up to an aggregate principal amount of $550 million outstanding at any one time;
(ii) any Real Estate Financing Transaction; provided, however, that the amount of Indebtedness outstanding under clause (i) above and this clause (ii) shall not in the aggregate exceed $550 million at any time outstanding;
(iii) the incurrence by the Company of Indebtedness represented by the Notes issued on the Issuance Date;
(iv) Existing Indebtedness (other than Indebtedness described in clauses (i) and (iii));
(v) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant incurrence not to this clause (v) (together with any Refinancing Indebtedness with respect thereto), does not exceed the greater of (x1) 65% of inventory plus 85% of accounts receivable of Sweetheart Holdings and its Restricted Subsidiaries (in each case as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, accounts receivable owned by a Receivables Subsidiary and inventory and accounts receivable of Lily Canada), and (2) $50 million or 205.0 million, reduced in the case of clause (y2) 10% by the amount of Total Assetsthe proceeds of any Asset Sales (including Asset Sales to a Receivables Subsidiary) applied to the permanent reduction of the revolving loan commitments under the Credit Agreement;
(vib) Indebtedness in respect of the Notes offered hereby and Existing Indebtedness;
(c) Permitted Refinancing Indebtedness incurred by the Company, Sweetheart Holdings or any of their Restricted Subsidiaries that is a Guarantor and issued in exchange for or the proceeds of which are used to extend, refinance, renew, replace, substitute or refund, Indebtedness referred to in the immediately preceding paragraph or clause (b) above, and Indebtedness contemplated by this clause (c);
(d) Indebtedness incurred by the Company Company, Sweetheart Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(vii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including noncash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its their Restricted Subsidiaries in connection with such disposition;
(viii) Indebtedness any Hedging Obligations, performance bonds, letter of the Company to a Restricted Subsidiary; provided that any such Indebtedness is made pursuant to an intercompany note credit obligations and is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) if a Guarantor incurs such Indebtedness from a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness;
(x) Hedging Obligations that are bank overdrafts incurred in the ordinary course of business or relating to (Aas determined in good faith by the Board of Directors of Sweetheart Holdings) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted required by the terms of the Indenture any Indebtedness permitted to be outstanding or incurred pursuant to this Section 4.09; (Be) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's Guarantee;
(xiii) additional Indebtedness of the Company and Company, Sweetheart Holdings or any of its Foreign their Restricted Subsidiaries not otherwise permitted hereunder that is a Guarantor (which Indebtedness may, but need not, be incurred under the Credit Agreement), including capital lease obligations and Purchase Money Obligations, in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant not to this clause (xiii), does not exceed $150 10.0 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, which when aggregated with reduced by the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and incurred pursuant to this clause (xiii), does not exceed $75 million (or the equivalent thereof in any other currency) at any one time outstanding;
(A) any guarantee by the Company of Indebtedness or other obligations of any of its Restricted Subsidiaries so long as the incurrence of such Indebtedness incurred by repaid with Net Proceeds of Asset Sales (other than Purchase Money Obligations repaid with the Net Proceeds of Asset Sales of the assets securing such Restricted Subsidiary is permitted under the terms of this Indenture and (B) any Excluded Guarantee (as defined in paragraph (a) of Section 1014) of a Restricted Subsidiary;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or restructure any Indebtedness incurred as permitted under paragraph (a) and clauses (iii) and (iv) above, or any Indebtedness issued to so refund, refinance or restructure such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the "Refinancing Indebtedness") prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of Indebtedness being refunded or refinanced, (BObligations) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu no reduction is made pursuant to the Notes, such Refinancing Indebtedness is subordinated or pari passu to the Notes at least to the same extent as the Indebtedness being refinanced or refunded and (C) shall not include (x) Indebtedness of a Subsidiary that refinances Indebtedness of the Company or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and provided further that subclauses (A) and (B) of this clause (xv) will not apply to any refunding or refinancing of any Senior Indebtedness; and
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in contemplation of such acquisition or merger; and provided further that after giving effect to such acquisition, either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) or (B) the Fixed Charge Coverage Ratio is greater than immediately prior to such acquisition.above;
Appears in 1 contract
