Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 (“Ratio Debt”). (b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”): (1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed the greater of (x) $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period; (2) Existing Indebtedness; (3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees; (4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Lease Obligations not associated with IRUs, mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause
Appears in 2 contracts
Samples: Indenture (Cogent Communications Holdings, Inc.), Indenture
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 5.0 to 1.00 (“Ratio Debt”)1.
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed exceed, when taken together with the greater amount of any Indebtedness or other obligations Incurred in connection with a Qualified Receivables Financing under clause (x20) below or otherwise, $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period30 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Capital Lease Obligations not associated with IRUs, mortgage financings financings, and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred and Disqualified or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding $30 million;
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be Incurred under Section 4.03(a) or clause (2), (3) or
Appears in 1 contract
Samples: Indenture
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiary Subsidiaries to, Incur any Indebted-ness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may Incur Indebtedness or (including Acquired Indebtedness) and issue shares of Disqualified Stock; provided that the Company or , and any Guarantor Restricted Subsidiary may Incur incur Indebtedness or (including Acquired Indebtedness), issue shares of Disqualified Disquali-fied Stock or and issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect to Pro Forma Effect thereto, the Incurrence Consolidated Coverage Ratio for the Issuer and its Restricted Subsidiaries for the most recently ended Test Period at the time of such Incurrence is no less than 2.00 to 1.00; provided, further, that Restricted Subsidiaries that are Non-Guarantors may not Incur Indebtedness (including Acquired Indebtedness, ) or the issuance issue shares of such Disqualified Disquali-fied Stock or Preferred StockStock pursuant to this Section 3.2(a) if, as after giving Pro Forma Effect to such Incurrence (including the case may be, and the receipt and pro forma application of the net proceeds therefrom), the Consolidated Leverage Ratio aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock of Non-Guarantors that would be positive out-standing at the time of such Incurrence pursuant to this Section 3.2(a), together with the aggregate principal amount of Indebtedness, Disqualified Stock and less than 6.00 to 1.00 Preferred Stock outstanding in reliance upon Section 3.2(b)(5)(x), would exceed the greater of (“Ratio Debt”)a) $160.0 million and (b) 40.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such Incurrence.
(b) Section 4.03(a3.2(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
: (1) the Incurrence by the Company Indebtedness Incurred pursuant to any Credit Facility, including letters of credit or bank-ers’ acceptances issued or created under any Guarantor such Credit Facility and Guarantees in respect of Indebtedness under a Revolving Credit Agreement (includingsuch Indebt-edness, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate outstanding principal amount at any one the time outstanding pursuant to this clause (1) of Incurrence not to exceed greater than $2,220.0 million, plus the greater of (x) $40.0 387.0 million and (y) 20.0% Consolidated EBITDA of Consolidated Cash Flow the Issuer for the Reference most recently ended Test Period;
, so long as immediately after giving effect to any such Incurrence and the application of net proceeds therefrom the Consolidated Secured Net Leverage Ratio does not exceed 4.75 to 1.00 (provided that any cash proceeds of any new Indebtedness then being Incurred shall not be netted from the numerator in the Consolidated Secured Net Leverage Ratio under this clause (1)(y) of Section 3.2(b) for purposes of determining whether such Indebtedness can be Incurred); (2) Existing Indebtedness;
(3) the Incurrence Guarantees by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture; (including 3) Indebtedness of the Issuer owing to, or Disqualified Stock or Preferred Stock of the Issu-er issued to, and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to, or -63- Disqualified Stock or Preferred Stock of a Restricted Subsidiary issued to, and held by the Issuer or any Restricted Subsidiary; provided, however, that: (i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary; and (ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or Pre-ferred Stock to a Person other than the Issuer or a Restricted Subsidiary (other than any pledge of such Indebtedness or Capital Stock constituting a Permitted Lien), shall be deemed, in each case, to constitute an Incurrence of such Indebtedness, Disqualified Stock or Pre-ferred Stock (to the extent such Indebtedness, Disqualified Stock or Preferred Stock is then outstanding) by the Issuer or such Restricted Subsidiary, as the case may be; (4) Indebtedness represented by Finance (A) the Notes (other than any Additional Notes), including any Note Guarantee thereof, (B) any Indebtedness (other than Indebtedness incurred pursuant to Sections 3.2(b)(1) and (3)) outstanding on the Escrow Release Date, (C) Refinancing Indebtedness Incurred in re-spect of any Indebtedness described in this clause (4) or clause (5) or (9) of Section 3.2(b) or Incurred pur-suant to Section 3.2(a), and (D) Management Advances; (5) (x) Indebtedness and Disqualified Stock Incurred by the Issuer or any Restricted Subsidi-ary, and Preferred Stock, Incurred by any Restricted Subsidiary, to finance an acquisition, merger, amal-gamation or consolidation; provided that the aggregate principal amount of Indebtedness (including Ac-quired Indebtedness), Disqualified Stock and Preferred Stock that may be Incurred pursuant to the forego-ing clause (x), together with the aggregate principal amount of Indebtedness, Disqualified Stock and Pre-ferred Stock outstanding in reliance upon Section 3.2(a), in each case, by Non-Guarantors shall not exceed the greater of (A) $140.0 million and (B) 35.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) or (y) Indebtedness, Disqualified Stock or Preferred Stock of Per-sons that are acquired by the Issuer or any Restricted Subsidiary in accordance with the terms hereof (in-cluding designating an Unrestricted Subsidiary a Restricted Subsidiary), which Indebtedness, Disqualified Stock or Preferred Stock exists at the time of such acquisition and is not created in contemplation thereof; provided that, after giving effect to such acquisition, merger, amalgamation, consolidation or designation described in this clause (5), on a Pro Forma Basis any of the following conditions are satisfied: (i) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Coverage Ratio test set forth in Section 3.2(a); (ii) the Consolidated Coverage Ratio of the Issuer and the Restricted Subsidiaries as of the most recently ended Test Period would not be lower than the Consolidated Coverage Ratio immediately prior to such acquisition, merger, amalgamation, consolidation, Investment or desig-nation; (iii) the Consolidated Total Net Leverage Ratio of the Issuer and the Restricted Sub-sidiaries is not greater than 5.80 to 1.00 as of the most recently ended Test Period; provided that any cash proceeds of any new Indebtedness, Disqualified Stock or Preferred Stock then being In-curred shall not be netted from the numerator in the Consolidated Total Net Leverage Ratio for purposes of calculating the Consolidated Total Net Leverage Ratio under this clause (5)(iii) for purposes of determining whether such Indebtedness, Disqualified Stock or Preferred Stock can be Incurred; (iv) the Consolidated Total Net Leverage Ratio of the Issuer and the Restricted Sub-sidiaries as of the most recently ended Test Period would not be higher than immediately prior to such acquisition, merger, amalgamation, consolidation or designation; provided that any cash pro-ceeds of any new Indebtedness, Disqualified Stock or Preferred Stock then being Incurred shall -64- not be netted from the numerator in the Consolidated Total Net Leverage Ratio for purposes of calculating the Consolidated Total Net Leverage Ratio under this clause (5)(iv) for purposes of de-termining whether such Indebtedness, Disqualified Stock or Preferred Stock can be Incurred; or (v) in the case of Indebtedness, such Indebtedness constitutes Acquired Indebted-ness (other than Indebtedness Incurred in contemplation of the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise ac-quired by the Issuer or a Restricted Subsidiary); provided that the only obligors with respect to such Indebtedness shall be those Persons who were obligors (or required to be obligors) of such Indebtedness prior to such acquisition, merger, amalgamation or consolidation; (6) Hedging Obligations (excluding Hedging Obligations entered into for speculative pur-poses); (7) Indebtedness and Disqualified Stock Incurred by the Issuer or any Restricted Subsidiary and Preferred Stock Incurred by any Restricted Subsidiary, in each case represented by Capitalized Lease Obligations (in the case of Indebtedness) or Purchase Money Obligations in an aggregate outstanding prin-cipal amount which, when taken together with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock Incurred pursuant to this clause and then outstanding, does not associated exceed the great-er of (a) $120.0 million and (b) 30.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of Incurrence and any Refinancing Indebtedness in respect thereof; provided that Capitalized Lease Obligations Incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (7) in connection with IRUsa Permitted Sale and Leaseback shall not be subject to the foregoing limitation so long as the net cash proceeds of such Permitted Sale and Leaseback are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding term loans under any Credit Facility or other Indebtedness secured by a Lien on the assets subject to such Permitted Sale and Leaseback; (8) Indebtedness in respect of (i) workers’ compensation claims, mortgage financings self-insurance obligations, performance, indemnity, surety, judgment, appeal, advance payment, customs, value added or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warran-ties provided by the Issuer or a Restricted Subsidiary or relating to liabilities, obligations or guarantees In-curred in the ordinary course of business or consistent with past practice; (ii) the honoring by a bank or oth-er financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordi-nary course of business or consistent with past practice; provided, however, that such Indebtedness is extin-guished within five Business Days of Incurrence; (iii) customer deposits and advance payments received in the ordinary course of business or consistent with past practice from customers for goods or services pur-chased in the ordinary course of business or consistent with past practice; (iv) letters of credit, bankers’ ac-ceptances, guarantees or other similar instruments or obligations issued or relating to liabilities or obliga-tions Incurred in the ordinary course of business or consistent with past practice; and (v) any customary treasury, depositary, cash management, automatic clearinghouse arrangements, overdraft protections, cash pooling or netting or setting off arrangements or similar arrangements in the ordinary course of business or consistent with past practice, including financial accommodations of the type described in the definition of “Cash Management Services” or “Bank Products”; (9) Indebtedness arising from agreements providing for guarantees, indemnification, obliga-tions in respect of earn-outs or other adjustments of purchase money price or, in each case, similar obligations) , in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets or Person or any Capital Stock of a Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring or disposing of such business or assets or such Subsidiary for the purpose of financing all such ac-quisition or any part disposition); (10) Indebtedness and Disqualified Stock of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvementIssuer, and whether through the direct purchase of such assets or through the purchase of the Capital Indebtedness, Disqualified Stock and Preferred Stock of any Person owning such assets)Restricted Subsidiary, in an aggregate amountoutstanding principal amount which, including when taken together with the principal amount of all Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any other Indebtedness Incurred pursuant to this clauseclause and then outstanding, will not exceed 100% of the net cash proceeds received by the Issuer from the issu-ance or sale (other than to a Restricted Subsidiary) of its Subordinated Shareholder Funding or Capital -65-
Appears in 1 contract
Samples: Indenture (Diversey Holdings, Ltd.)
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 5.0 to 1.00 (“Ratio Debt”)1.
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed exceed, when taken together with the greater amount of any Indebtedness or other obligations Incurred in connection with a Qualified Receivables Financing under clause (x20) below or otherwise, $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period30 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Capital Lease Obligations not associated with IRUs, mortgage financings and or purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred and Disqualified or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding $15 million;
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be Incurred under Section 4.03(a) or clauses (2), (3) or (5) of this Section 4.03(b), including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums, fees and expenses in connection therewith;
(6) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness owing to and held by the Company or any Restricted Subsidiary; provided that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a non-Guarantor Restricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(b) any event that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness) will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) (i) the Guarantee by the Company or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary and (ii) the Guarantee by a non-Guarantor Restricted Subsidiary of Indebtedness of another non-Guarantor Restricted Subsidiary, in each case, that was permitted to be Incurred by another provision of this Section 4.03;
(8) the Incurrence by the Company or any Guarantor of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;
(9) the Incurrence by the Company or any Guarantor of Indebtedness arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition or acquisition of any business, assets or Capital Stock of a Guarantor (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Guarantor for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Guarantor in connection with such disposition;
(10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in respect of bid, performance or surety bonds or letters of credit issued in the ordinary course of business, including letters of credit supporting lease obligations or supporting such bid, performance or surety bonds or in respect of workers’ compensation claims, health, disability or other employee benefits (whether current of former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims; provided that, upon the drawing of such letters of credit or the Incurrence of such repayment or reimbursement obligations under any such bid, performance or surety bonds, such obligations are reimbursed within 30 days following such drawing or Incurrence;
(11) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness to the extent the net cash proceeds thereof are promptly deposited pursuant to Section 8.02, 8.03 or 14.01;
(12) customer deposits and advance payments received from customers for goods and services sold in the ordinary course of business;
(13) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) represented by an IRU which is entered into in the ordinary course of business;
(14) the Incurrence by the Company or any Restricted Subsidiary of additional Indebtedness in an aggregate amount at any one time outstanding pursuant to this clause (14), not to exceed $25 million, provided that the principal amount of Indebtedness Incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (14) does not exceed $15 million at any one time outstanding;
(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 five Business Days of its Incurrence;
(16) Indebtedness, Disqualified Stock or Preferred Stock (i) of the Company or any of its Restricted Subsidiaries Incurred to finance an acquisition and (ii) 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, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(a) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in Section 4.03(a); or
(b) the Consolidated Leverage Ratio would be less than immediately prior to such acquisition;
(17) Indebtedness owed on a short-term basis to banks and other financial institutions Incurred in the ordinary course of business of the Company and the Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and the Restricted Subsidiaries;
(18) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms;
(19) 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 that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another 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 not permitted by this clause (19);
(20) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings) in an amount, when taken together with all Indebtedness Incurred under clause (1) above, will not exceed $30 million at any one time outstanding; and
(21) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories described in clauses (1) through (21) of Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, at the time of Incurrence, divide, classify or reclassify, or at any later time divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness, provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with this covenant, (x) all Preferred Stock issued by a Subsidiary of such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends and (y) all Disqualified Stock issued by such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends. For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock or Preferred Stock which does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock, as applicable, as if such Disqualified Stock or Preferred Stock were repurchased on any date on which Indebtedness will be required to be determined pursuant to this Indenture.
(e) 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 or first Incurred (whichever yields the lower U.S. dollar-equivalent), 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.
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 5.0 to 1.00 (“Ratio Debt”)1.
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed exceed, when taken together with the greater amount of any Indebtedness or other obligations Incurred in connection with a Qualified Receivables Financing under clause (x20) below or otherwise, $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period30 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees issued on the Issue Date and the related Note GuaranteesDate;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Capital Lease Obligations not associated with IRUs, mortgage financings and or purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred and Disqualified or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding $15 million;
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be Incurred under Section 4.03(a) or clauses (2), (3) or (5) of this Section 4.03(b), including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums, fees and expenses in connection therewith;
(6) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness owing to and held by the Company or any Restricted Subsidiary; provided that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a non-Guarantor Restricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(b) any event that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness) will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) (i) the Guarantee by the Company or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary and (ii) the Guarantee by a non-Guarantor Restricted Subsidiary of Indebtedness of another non-Guarantor Restricted Subsidiary, in each case, that was permitted to be Incurred by another provision of this Section 4.03;
(8) the Incurrence by the Company or any Guarantor of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;
(9) the Incurrence by the Company or any Guarantor of Indebtedness arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition or acquisition of any business, assets or Capital Stock of a Guarantor (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Guarantor for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Guarantor in connection with such disposition;
(10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in respect of bid, performance or surety bonds or letters of credit issued in the ordinary course of business, including letters of credit supporting lease obligations or supporting such bid, performance or surety bonds or in respect of workers’ compensation claims, health, disability or other employee benefits (whether current of former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims; provided that, upon the drawing of such letters of credit or the Incurrence of such repayment or reimbursement obligations under any such bid, performance or surety bonds, such obligations are reimbursed within 30 days following such drawing or Incurrence;
(11) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness to the extent the net cash proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes as described under Sections 8.02, 8.03 or 14.01;
(12) customer deposits and advance payments received from customers for goods and services sold in the ordinary course of business;
(13) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) represented by an IRU which is entered into in the ordinary course of business;
(14) the Incurrence by the Company or any Restricted Subsidiary of additional Indebtedness in an aggregate amount at any one time outstanding pursuant to this clause (14), not to exceed $25 million, provided that the principal amount of Indebtedness Incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (14) does not exceed $15 million at any one time outstanding;
(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 five Business Days of its Incurrence;
(16) Indebtedness, Disqualified Stock or Preferred Stock (i) of the Company or any of its Restricted Subsidiaries Incurred to finance an acquisition and (ii) 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, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(a) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in Section 4.03(a); or
(b) the Consolidated Leverage Ratio would be less than immediately prior to such acquisition;
(17) Indebtedness owed on a short-term basis to banks and other financial institutions Incurred in the ordinary course of business of the Company and the Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and the Restricted Subsidiaries;
(18) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms;
(19) 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 that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another 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 not permitted by this clause (19);
(20) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings) in an amount, when taken together with all Indebtedness Incurred under clause (1) above, will not exceed $30 million at any one time outstanding; and
(21) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories described in clauses (1) through (21) of Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, at the time of Incurrence, divide, classify or reclassify, or at any later time divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness, provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with this covenant, (x) all Preferred Stock issued by a Subsidiary of such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends and (y) all Disqualified Stock issued by such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends. For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock or Preferred Stock which does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock, as applicable, as if such Disqualified Stock or Preferred Stock were repurchased on any date on which Indebtedness will be required to be determined pursuant to this Indenture.
(e) 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 or first Incurred (whichever yields the lower U.S. dollar-equivalent), 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.
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, either (x) the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 or (y) the Fixed Charge Coverage Ratio would be 2.00 to 1.00 or greater (“Ratio Debt”).
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed the greater of (x) $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period75.0 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Lease Obligations not associated with IRUs, mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding, the greater of (x) $50.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period; provided that Finance Lease Obligations Incurred by the Company or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Leaseback Transaction are used by the Company or such Restricted Subsidiary to permanently repay outstanding loans under any Indebtedness secured by a Lien (it being understood that any Indebtedness Incurred pursuant to this clause (4) shall cease to be deemed Incurred and outstanding pursuant to this clause (4) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Company or any such Guarantor, as the case may be, could have Incurred such Indebtedness as Ratio Debt (to the extent the Company or any such Guarantor is able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness, Disqualified Stock and Preferred Stock that was permitted by this Indenture to be Incurred as Ratio Debt, under this clause (5) or under clause (2), (3) or (16) of this Section 4.03(b) or subclause (y) of any of clauses (4) or (14) (provided that any amounts Incurred under this clause (5) as Permitted Refinancing Indebtedness in respect of Indebtedness, Disqualified Stock and Preferred Stock Incurred pursuant to subclause (y) of any of these clauses shall reduce the amount available under such subclause (y) of such clause so long as such Permitted Refinancing Indebtedness remains outstanding (but, in each case, not below $0)), including any Increased Amount;
(6) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness or Disqualified Stock owing to and held by the Company or any Restricted Subsidiary; provided that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness or Disqualified Stock and such Indebtedness or Disqualified Stock is owed to a non-Guarantor Restricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(b) any event that results in any such Indebtedness or Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness or Disqualified Stock) will be deemed, in each case, to constitute an Incurrence of such Indebtedness or Disqualified Stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) (i) the Guarantee by the Company or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary and (ii) the Guarantee by a non-Guarantor Restricted Subsidiary of Indebtedness of another non-Guarantor Restricted Subsidiary, in each case, that was permitted to be Incurred by another provision of this Section 4.03;
(8) the Incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;
(9) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary (other than Guarantees of Indebtedness, Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;
(10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in respect of bid, performance or surety bonds or letters of credit issued in the ordinary course of business, including letters of credit supporting lease obligations or supporting such bid, performance or surety bonds or in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance;
(11) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock to the extent the net cash proceeds thereof are promptly deposited pursuant to Sections 8.02, 8.03 or 14.01;
(12) customer deposits and advance payments received from customers for goods and services sold in the ordinary course of business;
(13) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Finance Lease Obligations) represented by an IRU which is entered into in the ordinary course of business;
(14) the Incurrence by the Company or any Restricted Subsidiary of additional Indebtedness, Disqualified Stock or Preferred Stock in an aggregate amount at any one time outstanding pursuant to this clause (14), not to exceed $100.0 million; provided that the principal amount of Indebtedness, Disqualified Stock or Preferred Stock Incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (14) does not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (14) shall cease to be deemed Incurred and outstanding pursuant to this clause (14) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Company or any such Guarantor, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt);
(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;
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiary Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may Incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock; provided that the Company or , and any Guarantor may Incur incur Indebtedness or (including Acquired Indebtedness), issue shares of Disqualified Stock or and issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefromPro Forma Effect thereto, the Consolidated Leverage Coverage Ratio would be positive for the Issuer and its Restricted Subsidiaries for the most recently ended Test Period at the time of such Incurrence is no less than 6.00 2.00 to 1.00 (“Ratio Debt”)determined on a Pro Forma Basis.
(b) Section 4.03(a3.2(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”)::
(1) the Incurrence by the Company (x) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereofFacility) in an aggregate outstanding principal amount at any one the time outstanding of Incurrence not greater than (i) $1,095.0 million, plus (ii) additional amounts, so long as in the case of this clause (ii) only, on the date of such Incurrence and after giving Pro Forma Effect thereto the Consolidated Secured Net Leverage Ratio of the Issuer and its Restricted Subsidiaries does not exceed 3.90 to 1.00 as of the most recently ended Test Period at the time of such Incurrence (provided that for purposes of determining the amount that may be Incurred under this clause (1)(x)(ii), (I) all Indebtedness then being Incurred pursuant to this clause (11)(x)(ii) not on such date in reliance on this clause (1)(x)(ii) shall be deemed to exceed the greater of be included as Consolidated Secured Indebtedness in clause (x) $40.0 million of the definition of “Consolidated Secured Net Leverage Ratio” and (II) any cash proceeds of any new Indebtedness then being incurred shall not be netted from the numerator in the Consolidated Secured Net Leverage Ratio for purposes of calculating the Consolidated Secured Net Leverage Ratio under this clause (1)(x)(ii) for purposes of determining whether such Indebtedness can be Incurred), and (y) 20.0% any Refinancing Indebtedness Incurred in respect of Consolidated Cash Flow for the Reference Periodany Indebtedness described in clause (1)(x);
(2) Existing Indebtedness;
(3) the Incurrence Guarantees by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture;
(including 3) Indebtedness of the Issuer owing to, or Disqualified Stock or Preferred Stock of the Issuer issued to, and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to, or Disqualified Stock or Preferred Stock of a Restricted Subsidiary issued to, and held by the Issuer or any Restricted Subsidiary; provided, however, that:
(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or Preferred Stock to a Person other than the Issuer or a Restricted Subsidiary (other than any pledge of such Indebtedness or Capital Stock constituting a Permitted Lien); shall be deemed, in each case, to constitute an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock (to the extent such Indebtedness, Disqualified Stock or Preferred Stock is then outstanding) by the Issuer or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by Finance Lease Obligations not associated with IRUs(a) the Notes (other than any Additional Notes), mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Guarantee thereof, (b) any Indebtedness (other than Indebtedness incurred pursuant to Section 3.2(b)(1) and (3)) outstanding on the Issue Date, (c) Refinancing Indebtedness Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock respect of any Person owning such assets), Indebtedness described in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease this clause (4) or discharge any Indebtedness clause (5) of Section 3.2(b) or Incurred pursuant to this clauseSection 3.2(a), and (d) Management Advances;
Appears in 1 contract
Samples: Indenture (Surgery Partners, Inc.)
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any Restricted Subsidiary to, Incur Incur, directly or indirectly, any Indebtedness or issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided provided, however, that the Company or any Guarantor may Issuer and its Restricted Subsidiaries will be entitled to Incur Indebtedness or issue shares of Disqualified Stock or and any Restricted Subsidiary may issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio equals or exceeds 2:00 to 1.00; provided, further, that the Incurrence aggregate amount of such Indebtedness, or the issuance of such Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock, as the case Stock that may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 (“Ratio Debt”).
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding issued pursuant to this clause (1) the foregoing by Restricted Subsidiaries that are not to Guarantors shall not exceed the greater of (x) $40.0 105.0 million and (y) 20.04.25% of Consolidated Cash Flow for Total Assets at the Reference Periodtime of Incurrence, at any one time outstanding.
(b) Notwithstanding Section 4.09(a), the Issuer and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness incurred by the Issuer or its Restricted Subsidiaries pursuant to Credit Facilities, the Guarantees thereof 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 hereof) up to an aggregate principal amount or liquidation preference, if applicable, at any one time outstanding, (a) with respect to any ABL Obligations or any other Indebtedness that is secured by Liens on the Fixed Asset Collateral with a priority that is junior to the Liens on the Fixed Asset Collateral securing the Notes (including any Indebtedness that is secured by Liens on the ABL Collateral with a priority that is senior to the Liens on the ABL Collateral securing the Notes), not to exceed the greater of (i) $280.0 million and (ii) the Borrowing Base as of the date of such incurrence or issuance and/or (b) with respect to any Indebtedness incurred under the Term Loan Credit Facility not to exceed $330.0 million ((A) any Indebtedness outstanding under the ABL Credit Facility on the Issue Date after the application of the net proceeds from the sale of the Notes and any Indebtedness Incurred under the ABL Credit Facility after the Issue Date will be treated as Incurred under clause (1)(a) and (B) any Indebtedness outstanding under the Term Loan Credit Facility on the Issue Date after the application of the net proceeds from the sale of the Notes and any Indebtedness Incurred under the Term Loan Credit Facility after the Issue Date that was Incurred pursuant to clause (1)(b) will be treated as Incurred under clause (1)(b), and in each case, cannot be reclassified pursuant to clause (1) or (2) of Section 4.09(d));
(2) Existing IndebtednessIndebtedness owed to and held by the Issuer or a Restricted Subsidiary or shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness or Preferred Stock (other than to the Issuer or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon not permitted pursuant to this clause (2), (B) if the Issuer is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness and the Issuer or a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee related to the Notes;
(3) the Incurrence by the Company Notes and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guaranteesany Subsidiary Guarantee but excluding any Additional Notes;
(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clauses (1), (2) or (3) of this Section 4.09(b));
(5) Indebtedness, Disqualified Stock or Preferred Stock of (i) the Issuer or any of its Restricted Subsidiaries Incurred or issued to finance an acquisition or (ii) Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged into, amalgamated with or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided, however, that after giving effect to such acquisition, merger, amalgamation or consolidation and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock:
(A) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or
(B) the Consolidated Fixed Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger, amalgamation or consolidation;
(6) the Incurrence or issuance by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer that serves to Refinance any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to Section 4.09(a) or clauses (3), (4) (other than the Existing Notes), (5), this clause (6) or (12) of this Section 4.09(b), or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so Refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay accrued and unpaid interest and dividends and premiums (including tender premiums), defeasance costs and fees and expenses in connection with such Refinancing (subject to the following proviso, “Refinancing Indebtedness”) on or 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 that is (x) not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being Refinanced or (y) at least 91 days after the Weighted Average Life to Maturity of the principal of the Notes;
(B) has a Stated Maturity which is (x) no earlier than the Stated Maturity of the Indebtedness being Refinanced or (y) at least 91 days after the Stated Maturity of the principal of the Notes;
(C) to the extent such Refinancing Indebtedness is secured, the Liens securing such Refinancing Indebtedness have a Lien priority equal to or junior to the Liens securing the Indebtedness being refinanced; and
(D) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor that Refinances Indebtedness of a Restricted Subsidiary of the Issuer that is not a Guarantor or (y) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary;
(7) Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes);
(8) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities entered into, or relating to obligations or liabilities incurred, in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self insurance; 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;
(9) 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;
(10) any Guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by the Issuer or such Restricted Subsidiary is permitted by this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Fixed Asset Obligations, any such Guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee of the Notes substantially to the same extent as such Indebtedness is subordinated to the Fixed Asset Obligations;
(including 11) Indebtedness represented by Finance (including, without limitation, Capitalized Lease Obligations not associated with IRUs, and mortgage financings and as purchase money obligations) ), Incurred for by the purpose Issuer or any of financing its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase price purchase, lease or cost of leasedesign, construction, installation, replacement, repair or improvement of propertyproperty (real or personal), plant or equipment or other fixed or capital assets used or useful in the business of the Company Issuer or such its Restricted Subsidiary Subsidiaries or in a Similar Business (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), ) in an aggregate amountprincipal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clauseclause (11), not to exceed at any one time outstanding the greater of (x) $95.0 million and (y) 3.75% of Consolidated Total Assets at the time of Incurrence;
(12) Indebtedness Incurred by Foreign Subsidiaries of the Issuer in an aggregate principal amount (or accreted value, as applicable), at any time outstanding, not to exceed the greater of (x) $95.0 million and (y) 3.75% of Consolidated Total Assets;
(13) Indebtedness Incurred in a Permitted Receivables Financing;
(14) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business, not to exceed $5.0 million at any one time outstanding;
(15) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, bankers’ acceptance facilities and completion guarantees, customs, VAT or other tax 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;
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company From and after the Acquisition Effective Date, the Issuer will not, and will not permit any of its Restricted Subsidiary Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may Incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock; provided that the Company or , and any Guarantor may Incur incur Indebtedness or (including Acquired Indebtedness), issue shares of Disqualified Stock or and issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefromPro Forma Effect thereto, the Consolidated Leverage Coverage Ratio would be positive for the Issuer and its Restricted Subsidiaries for the most recently ended Test Period at the time of such Incurrence is no less than 6.00 2.00 to 1.00 (“Ratio Debt”)determined on a Pro Forma Basis.
(b) Section 4.03(a3.2(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”)::
(1) the Incurrence by the Company (x) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereofFacility) in an aggregate outstanding principal amount at any one the time outstanding of Incurrence not greater than (i) $1,711.0 million, plus (ii) additional amounts, so long as in the case of this clause (ii) only, on the date of such Incurrence and after giving Pro Forma Effect thereto the Consolidated Secured Net Leverage Ratio of the Issuer and its Restricted Subsidiaries does not exceed 3.90 to 1.00 as of the most recently ended Test Period at the time of such Incurrence (provided that for purposes of determining the amount that may be Incurred under this clause (1)(x)(ii), (I) all Indebtedness then being Incurred pursuant to this clause (11)(x)(ii) not on such date in reliance on this clause (1)(x)(ii) shall be deemed to exceed the greater of be included as Consolidated Secured Indebtedness in clause (x) $40.0 million of the definition of “Consolidated Secured Net Leverage Ratio” and (II) any cash proceeds of any new Indebtedness then being incurred shall not be netted from the numerator in the Consolidated Secured Net Leverage Ratio for purposes of calculating the Consolidated Secured Net Leverage Ratio under this clause (1)(x)(ii) for purposes of determining whether such Indebtedness can be Incurred), and (y) 20.0% any Refinancing Indebtedness Incurred in respect of Consolidated Cash Flow for the Reference Periodany Indebtedness described in clause (1)(x);
(2) Existing Indebtedness;
(3) the Incurrence Guarantees by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture;
(including 3) Indebtedness of the Issuer owing to, or Disqualified Stock of the Issuer issued to, and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to, or Disqualified Stock or Preferred Stock of a Restricted Subsidiary issued to, and held by the Issuer or any Restricted Subsidiary; provided, however, that:
(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or Preferred Stock to a Person other than the Issuer or a Restricted Subsidiary (other than any pledge of such Indebtedness or Capital Stock constituting a Permitted Lien); shall be deemed, in each case, to constitute an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock (to the extent such Indebtedness, Disqualified Stock or Preferred Stock is then outstanding) by the Issuer or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by Finance Lease Obligations not associated with IRUs(a) the Notes (other than any Additional Notes), mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees Guarantee thereof, (b) any Indebtedness (other than Indebtedness incurred pursuant to clause (1) or expenses (3) of this Section 3.2(b)) outstanding on the Acquisition Effective Date, (c) Indebtedness under the Existing Notes (other than any “Additional Notes” issued under the Existing Notes Indenture) and any Guarantee thereof, (d) Refinancing Indebtedness Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock respect of any Person owning such assets), Indebtedness described in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease this clause (4) or discharge any Indebtedness clause (5) of Section 3.2(b) or Incurred pursuant to this clauseSection 3.2(a), and (e) Management Advances;
Appears in 1 contract
Samples: Indenture (Surgery Partners, Inc.)
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company Company, the Co-Issuer or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, either (x) the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 or (y) the Fixed Charge Coverage Ratio would be 2.00 to 1.00 or greater (“Ratio Debt”).
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company Company, the Co-Issuer or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company Company, the Co-Issuer and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed the greater of (x) $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period75.0 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company Company, the Co-Issuer and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Lease Obligations not associated with IRUs, mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding, the greater of (x) $50.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period; provided that Finance Lease Obligations Incurred by the Company or any Restricted Subsidiary pursuant to this clause (4) in connection with a Sale and Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale and Leaseback Transaction are used by the Company or such Restricted Subsidiary to permanently repay outstanding loans under any Indebtedness secured by a Lien (it being understood that any Indebtedness Incurred pursuant to this clause (4) shall cease to be deemed Incurred and outstanding pursuant to this clause (4) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Company, the Co-Issuer or any such Guarantor, as the case may be, could have Incurred such Indebtedness as Ratio Debt (to the extent either of the Issuers or any such Guarantor is able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness, Disqualified Stock and Preferred Stock that was permitted by this Indenture to be Incurred as Ratio Debt, under this clause (5) or under clause (2), (3) or (16) of this Section 4.03(b) or subclause (y) of any of clauses (4) or (14) (provided that any amounts Incurred under this clause (5) as Permitted Refinancing Indebtedness in respect of Indebtedness, Disqualified Stock and Preferred Stock Incurred pursuant to subclause (y) of any of these clauses shall reduce the amount available under such subclause (y) of such clause so long as such Permitted Refinancing Indebtedness remains outstanding (but, in each case, not below $0)), including any Increased Amount;
(6) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness or Disqualified Stock owing to and held by the Company or any Restricted Subsidiary; provided that:
(a) if the Company, the Co-Issuer or any Guarantor is the obligor on such Indebtedness or Disqualified Stock and such Indebtedness or Disqualified Stock is owed to a non-Guarantor Restricted Subsidiary (other than the Co-Issuer), such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company or the Co-Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) any event that results in any such Indebtedness or Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness or Disqualified Stock) will be deemed, in each case, to constitute an Incurrence of such Indebtedness or Disqualified Stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(i) the Guarantee by the Company, the Co-Issuer or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary and (ii) the Guarantee by a non-Guarantor Restricted Subsidiary (other than the Co-Issuer) of Indebtedness of another non-Guarantor Restricted Subsidiary (other than the Co-Issuer), in each case, that was permitted to be Incurred by another provision of this Section 4.03;
(8) the Incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;
(9) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary (other than Guarantees of Indebtedness, Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;
(10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in respect of bid, performance or surety bonds or letters of credit issued in the ordinary course of business, including letters of credit supporting lease obligations or supporting such bid, performance or surety bonds or in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance;
(11) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock to the extent the net cash proceeds thereof are promptly deposited pursuant to Sections 8.02, 8.03 or 14.01;
(12) customer deposits and advance payments received from customers for goods and services sold in the ordinary course of business;
(13) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Finance Lease Obligations) represented by an IRU which is entered into in the ordinary course of business;
(14) the Incurrence by the Company or any Restricted Subsidiary of additional Indebtedness, Disqualified Stock or Preferred Stock in an aggregate amount at any one time outstanding pursuant to this clause (14), not to exceed $100.0 million; provided that the principal amount of Indebtedness, Disqualified Stock or Preferred Stock Incurred by any Restricted Subsidiary that is not a Guarantor (excluding the Co-Issuer) pursuant to this clause (14) does not exceed $50.0 million at any one time outstanding (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (14) shall cease to be deemed Incurred and outstanding pursuant to this clause (14) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Company, the Co-Issuer or any such Guarantor, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt);
(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;
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any Restricted Subsidiary to, Incur Incur, directly or indirectly, any Indebtedness or issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided provided, however, that the Company or any Guarantor may Issuer and its Restricted Subsidiaries will be entitled to Incur Indebtedness or issue shares of Disqualified Stock or and any Restricted Subsidiary may issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio equals or exceeds 2.00 to 1.00; provided, further, that the Incurrence aggregate amount of such Indebtedness, or the issuance of such Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock, as the case Stock that may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 (“Ratio Debt”).
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding issued pursuant to this clause (1) the foregoing by Restricted Subsidiaries that are not to Guarantors shall not exceed the greater of (x) $40.0 55.0 million and (y) 20.02.585% of Consolidated Cash Flow Total Assets at the time of Incurrence, at any one time outstanding.
(b) Notwithstanding Section 4.09(a), the Issuer and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness incurred by the Issuer or its Restricted Subsidiaries pursuant to Credit Facilities, the Guarantees thereof 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 hereof) consisting of ABL Obligations or any other Indebtedness that is secured by Liens on the Fixed Asset Collateral with a priority that is junior to the Liens on the Fixed Asset Collateral securing the First Lien Notes (including any Indebtedness that is secured by Liens on the ABL Collateral with a priority that is senior to the Liens on the ABL Collateral securing the First Lien Notes), up to an aggregate principal amount or liquidation preference, if applicable, at any one time outstanding, not to exceed the greater of (i) $253.0 million; (provided, that any Indebtedness outstanding and incurred under clause (11)(y) of this Section 4.09(b) will reduce capacity under this clause (b)(1)(i) on a dollar for dollar basis, provided, however, that the Reference Periodcapacity under this clause (b)(1)(i) shall not be reduced to less than $198.0 million in any event) and (ii) the sum of the U.S. Borrowing Base and the Canadian Borrowing Base as of the date of such incurrence or issuance (any Indebtedness under the ABL Credit Facility outstanding on the Issue Date (after the application of the net proceeds from the sale of the First Lien Notes) and any Indebtedness Incurred under the ABL Credit Facility after the Issue Date will be treated as Incurred under this clause (b)(1) and cannot be reclassified pursuant to clause (1) or (2) of Section 4.09(d));
(2) Existing Indebtedness;
(3) the Incurrence Indebtedness owed to and held by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any a Restricted Subsidiary or shares of Indebtedness Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, however, that (including Indebtedness represented by Finance Lease Obligations not associated with IRUs, mortgage financings and purchase money obligationsA) Incurred for the purpose any subsequent issuance or transfer of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used Capital Stock which results in the business of the Company or any such Restricted Subsidiary (including ceasing to be a Restricted Subsidiary or any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase subsequent transfer of such assets Indebtedness or through Preferred Stock (other than to the purchase of the Capital Stock of any Person owning such assets)Issuer or a Restricted Subsidiary) shall be deemed, in an aggregate amounteach case, including all to constitute the Incurrence of such Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred by the obligor thereon not permitted pursuant to this clauseclause (2), (B) if the Issuer is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness and the Issuer or a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee related to the Notes;
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiary Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may Incur Indebtedness (including Acquired Indebtedness) and 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, on the date of such Incurrence and after giving Pro Forma Effect thereto, the Consolidated Coverage Ratio for the Issuer and its Restricted Subsidiaries for the most recently ended Test Period at the time of such Incurrence is no less than 2.00 to 1.00; provided provided, further, that the Company or any Guarantor Non-Guarantors may not Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock or shares of Preferred Stock pursuant to this Section 3.2(a) if, after giving effect Pro Forma Effect to such Incurrence, the Incurrence aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock of Non-Guarantors that would be outstanding at the time of such Incurrence pursuant to this Section 3.2(a), together with the aggregate principal amount of Indebtedness, or Disqualified Stock and Preferred Stock outstanding in reliance upon Section 3.2(b)(5)(x), would exceed the issuance greater of (a) $100.0 million and (b) 39.6% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 (“Ratio Debt”)Incurrence.
(b) Section 4.03(a3.2(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”)::
(1) the Incurrence by the Company (x) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereofFacility) in an aggregate outstanding principal amount at any one the time outstanding of Incurrence not greater than (i) $1,250.0 million, plus (ii) the greater of (A) $245.0 million and (B) Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis), plus (iii) additional amounts, so long as in the case of this clause (iii) only, such amount on the date of such Incurrence and after giving Pro Forma Effect thereto can be Incurred without causing the Consolidated Secured Net Leverage Ratio of the Issuer and its Restricted Subsidiaries to exceed 4.60 to 1.00 as of the most recently ended Test Period at the time of such Incurrence (provided that for purposes of determining the amount that may be Incurred under this clause (1)(x)(iii), (I) all Indebtedness then being Incurred pursuant to this clause (11)(x)(iii) not on such date in reliance on this clause (1)(x)(iii) shall be deemed to exceed the greater of be included as Consolidated Secured Indebtedness in clause (x) $40.0 million of the definition of “Consolidated Secured Net Leverage Ratio” and (II) any cash proceeds of any new Indebtedness then being incurred shall not be netted from the numerator in the Consolidated Secured Net Leverage Ratio for purposes of calculating the Consolidated Secured Net Leverage Ratio under this clause (1)(x)(iii) for purposes of determining whether such Indebtedness can be Incurred), and (y) 20.0% any Refinancing Indebtedness Incurred in respect of Consolidated Cash Flow for the Reference Periodany Indebtedness described in clause (1)(x);
(2) Existing Indebtedness;
(3) the Incurrence Guarantees by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture;
(including 3) Indebtedness of the Issuer owing to, or Disqualified Stock or Preferred Stock of the Issuer issued to, and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to, or Disqualified Stock or Preferred Stock of a Restricted Subsidiary issued to, and held by the Issuer or any Restricted Subsidiary; provided, however, that:
(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or Preferred Stock to a Person other than the Issuer or a Restricted Subsidiary (other than any pledge of such Indebtedness or Capital Stock constituting a Permitted Lien); shall be deemed, in each case, to constitute an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock (to the extent such Indebtedness, Disqualified Stock or Preferred Stock is then outstanding) by the Issuer or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by Finance Lease Obligations not associated with IRUs(a) the Notes (other than any Additional Notes), mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Guarantee thereof, (b) any Indebtedness (other than Indebtedness incurred pursuant to Section 3.2(b)(1) and (3)) outstanding on the Issue Date, (c) Refinancing Indebtedness Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock respect of any Person owning such assets), Indebtedness described in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease this clause (4) or discharge any Indebtedness clause (5) of Section 3.2(b) or Incurred pursuant to this clauseSection 3.2(a), and (d) Management Advances;
Appears in 1 contract
Samples: Indenture (Blue Coat, Inc.)
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any Restricted Subsidiary to, Incur Incur, directly or indirectly, any Indebtedness or issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided provided, however, that the Company or any Guarantor may Issuer and its Restricted Subsidiaries will be entitled to Incur Indebtedness or issue shares of Disqualified Stock or and any Restricted Subsidiary may issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio equals or exceeds 2.00 to 1.00; provided, further, that the Incurrence aggregate amount of such Indebtedness, or the issuance of such Indebtedness that may be Incurred and Disqualified Stock or Preferred Stock, as the case Stock that may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 to 1.00 (“Ratio Debt”).
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding issued pursuant to this clause (1) the foregoing by Restricted Subsidiaries that are not to Guarantors shall not exceed the greater of (x) $40.0 50.0 million and (y) 20.02.35% of Consolidated Cash Flow Total Assets at the time of Incurrence, at any one time outstanding.
(b) Notwithstanding Section 4.09(a), the Issuer and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness incurred by the Issuer or its Restricted Subsidiaries pursuant to Credit Facilities, the Guarantees thereof 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 hereof) consisting of ABL Obligations or any other Indebtedness that is secured by Liens on the Fixed Asset Collateral with a priority that is junior to the Liens on the Fixed Asset Collateral securing the Notes (including any Indebtedness that is secured by Liens on the ABL Collateral with a priority that is senior to the Liens on the ABL Collateral securing the Notes), up to an aggregate principal amount or liquidation preference, if applicable, at any one time outstanding, not to exceed the greater of (i) $230.0 million; (provided, that any Indebtedness outstanding and incurred under clause (11)(y) of this Section 4.09(b) will reduce capacity under this clause (b)(1)(i) on a dollar for dollar basis, provided, however, that the Reference Periodcapacity under this clause (b)(1)(i) shall not be reduced to less than $180.0 million in any event) and (ii) the sum of the U.S. Borrowing Base and the Canadian Borrowing Base as of the date of such incurrence or issuance (any Indebtedness under the ABL Credit Facility outstanding on the Issue Date (after the application of the net proceeds from the sale of the Notes) and any Indebtedness Incurred under the ABL Credit Facility after the Issue Date will be treated as Incurred under this clause (b)(1) and cannot be reclassified pursuant to clause (1) or (2) of Section 4.09(d));
(2) Existing Indebtedness;
(3) the Incurrence Indebtedness owed to and held by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any a Restricted Subsidiary or shares of Indebtedness Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, however, that (including Indebtedness represented by Finance Lease Obligations not associated with IRUs, mortgage financings and purchase money obligationsA) Incurred for the purpose any subsequent issuance or transfer of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used Capital Stock which results in the business of the Company or any such Restricted Subsidiary (including ceasing to be a Restricted Subsidiary or any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase subsequent transfer of such assets Indebtedness or through Preferred Stock (other than to the purchase of the Capital Stock of any Person owning such assets)Issuer or a Restricted Subsidiary) shall be deemed, in an aggregate amounteach case, including all to constitute the Incurrence of such Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred by the obligor thereon not permitted pursuant to this clauseclause (2), (B) if the Issuer is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness and the Issuer or a Subsidiary Guarantor is not the obligee thereon, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guarantee related to the Notes;
Appears in 1 contract
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company Issuer will not, and will not permit any of its Restricted Subsidiary Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness) and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer may Incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock; provided that the Company or , and any Guarantor may Incur incur Indebtedness or (including Acquired Indebtedness), issue shares of Disqualified Stock or and issue shares of Preferred Stock if, on the date of such Incurrence and after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefromPro Forma Effect thereto, the Consolidated Leverage Coverage Ratio would be positive for the Issuer and its Restricted Subsidiaries for the most recently ended Test Period at the time of such Incurrence is no less than 6.00 2.00 to 1.00 (“Ratio Debt”)determined on a Pro Forma Basis.
(b) Section 4.03(a3.2(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”)::
(1) the Incurrence by the Company (x) Indebtedness Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereofFacility) in an aggregate outstanding principal amount at any one the time outstanding of Incurrence not greater than (i) $1,711.0 million, plus (ii) additional amounts, so long as in the case of this clause (ii) only, on the date of such Incurrence and after giving Pro Forma Effect thereto the Consolidated Secured Net Leverage Ratio of the Issuer and its Restricted Subsidiaries does not exceed 3.90 to 1.00 as of the most recently ended Test Period at the time of such Incurrence (provided that for purposes of determining the amount that may be Incurred under this clause (1)(x)(ii), (I) all Indebtedness then being Incurred pursuant to this clause (11)(x)(ii) not on such date in reliance on this clause (1)(x)(ii) shall be deemed to exceed the greater of be included as Consolidated Secured Indebtedness in clause (x) $40.0 million of the definition of “Consolidated Secured Net Leverage Ratio” and (II) any cash proceeds of any new Indebtedness then being incurred shall not be netted from the numerator in the Consolidated Secured Net Leverage Ratio for purposes of calculating the Consolidated Secured Net Leverage Ratio under this clause (1)(x)(ii) for purposes of determining whether such Indebtedness can be Incurred), and (y) 20.0% any Refinancing Indebtedness Incurred in respect of Consolidated Cash Flow for the Reference Periodany Indebtedness described in clause (1)(x);
(2) Existing Indebtedness;
(3) the Incurrence Guarantees by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary so long as the Incurrence of such Indebtedness is permitted under the terms of this Indenture;
(including 3) Indebtedness of the Issuer owing to, or Disqualified Stock of the Issuer issued to, and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to, or Disqualified Stock or Preferred Stock of a Restricted Subsidiary issued to, and held by the Issuer or any Restricted Subsidiary; provided, however, that:
(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary; and
(ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or Preferred Stock to a Person other than the Issuer or a Restricted Subsidiary (other than any pledge of such Indebtedness or Capital Stock constituting a Permitted Lien); shall be deemed, in each case, to constitute an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock (to the extent such Indebtedness, Disqualified Stock or Preferred Stock is then outstanding) by the Issuer or such Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by Finance Lease Obligations not associated with IRUs(a) the Notes (other than any Additional Notes), mortgage financings and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees Guarantee thereof, (b) any Indebtedness (other than Indebtedness incurred pursuant to clause (1) or expenses (3) of this Section 3.2(b)) outstanding on the Issue Date, (c) Indebtedness under the Existing Notes (other than any “Additional Notes” issued under the Existing Notes Indenture) and any Guarantee thereof, (d) Refinancing Indebtedness Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock respect of any Person owning such assets), Indebtedness described in an aggregate amount, including all Indebtedness Incurred to renew, refund, refinance, replace, defease this clause (4) or discharge any Indebtedness clause (5) of Section 3.2(b) or Incurred pursuant to this clauseSection 3.2(a), and (e) Management Advances;
Appears in 1 contract
Samples: Indenture (Surgery Partners, Inc.)
Limitation on Indebtedness, Disqualified Stock and Preferred Stock. (a) The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness or issue shares of Disqualified Stock; provided that the Company or any Guarantor may Incur Indebtedness or issue shares of Disqualified Stock or shares of Preferred Stock if, after giving effect to the Incurrence of such Indebtedness, or the issuance of such Disqualified Stock or Preferred Stock, as the case may be, and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be positive and less than 6.00 5.0 to 1.00 (“Ratio Debt”)1.
(b) Section 4.03(a) will not prohibit the Incurrence of any of the following (collectively, “Permitted Indebtedness”):
(1) the Incurrence by the Company or any Guarantor of Indebtedness under a Revolving Credit Agreement (including, without limitation, the Incurrence by the Company and the Guarantors of Guarantees thereof) in an aggregate amount at any one time outstanding pursuant to this clause (1) not to exceed exceed, when taken together with the greater amount of any Indebtedness or other obligations Incurred in connection with a Qualified Receivables Financing under clause (x20) below or otherwise, $40.0 million and (y) 20.0% of Consolidated Cash Flow for the Reference Period30 million;
(2) Existing Indebtedness;
(3) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(4) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Indebtedness represented by Finance Capital Lease Obligations not associated with IRUs, mortgage financings financings, and purchase money obligations) Incurred for the purpose of financing all or any part of the purchase price or cost of lease, construction, installation, repair or improvement of property, plant or equipment or other fixed or capital assets used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement, and whether through the direct purchase of such assets or through the purchase of the Capital Stock of any Person owning such assets), in an aggregate amount, including all Indebtedness Incurred and Disqualified or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clauseclause (4), not to exceed, at any time outstanding $30 million;
(5) the Incurrence by the Company or any Restricted Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be Incurred under Section 4.03(a) or clause (2), (3) or (5) of this Section 4.03(b), including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums, fees and expenses in connection therewith;
(6) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness owing to and held by the Company or any Restricted Subsidiary; provided that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a non-Guarantor Restricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(b) any event that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness) will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) (i) the Guarantee by the Company or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary and (ii) the Guarantee by a non-Guarantor Restricted Subsidiary of Indebtedness of another non-Guarantor Restricted Subsidiary, in each case, that was permitted to be Incurred by another provision of this Section 4.03;
(8) the Incurrence by the Company or any Guarantor of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;
(9) the Incurrence by the Company or any Guarantor of Indebtedness arising from agreements providing for indemnification, earn-outs, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition or acquisition of any business, assets or Capital Stock of a Guarantor (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Guarantor for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Guarantor in connection with such disposition;
(10) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness in respect of bid, performance or surety bonds or letters of credit issued in the ordinary course of business, including letters of credit supporting lease obligations or supporting such bid, performance or surety bonds or in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims; provided that, upon the drawing of such letters of credit or the Incurrence of such repayment or reimbursement obligations under any such bid, performance or surety bonds, such obligations are reimbursed within 30 days following such drawing or Incurrence;
(11) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness to the extent the net cash proceeds thereof are promptly deposited pursuant to Sections 8.02, 8.03 or 14.01;
(12) customer deposits and advance payments received from customers for goods and services sold in the ordinary course of business;
(13) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) represented by an IRU which is entered into in the ordinary course of business;
(14) the Incurrence by the Company or any Restricted Subsidiary of additional Indebtedness in an aggregate amount at any one time outstanding pursuant to this clause (14), not to exceed $25 million, provided that the principal amount of Indebtedness Incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (14) does not exceed $15 million at any one time outstanding;
(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 five Business Days of its Incurrence;
(16) Indebtedness, Disqualified Stock or Preferred Stock (i) of the Company or any of its Restricted Subsidiaries Incurred to finance an acquisition and (ii) 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, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(a) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in Section 4.03(a); or
(b) the Consolidated Leverage Ratio would be less than immediately prior to such acquisition;
(17) Indebtedness owed on a short-term basis to banks and other financial institutions Incurred in the ordinary course of business of the Company and the Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and the Restricted Subsidiaries;
(18) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s-length commercial terms;
(19) 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 that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another 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 not permitted by this clause (19);
(20) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings) in an amount, when taken together with all Indebtedness Incurred under clause (1) above, will not exceed $30 million at any one time outstanding; and
(21) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories described in clauses (1) through (21) of Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, at the time of Incurrence, divide, classify or reclassify, or at any later time divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness, provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with this covenant, (x) all Preferred Stock issued by a Subsidiary of such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends and (y) all Disqualified Stock issued by such Person shall be valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends. For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock or Preferred Stock which does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock or Preferred Stock, as applicable, as if such Disqualified Stock or Preferred Stock were repurchased on any date on which Indebtedness will be required to be determined pursuant to this Indenture.
(e) 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 or first Incurred (whichever yields the lower U.S. dollar-equivalent), 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.
Appears in 1 contract
