Common use of Limitation on Restricted Payments Clause in Contracts

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 4 contracts

Samples: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)

AutoNDA by SimpleDocs

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiary Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company or in options, warrants payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation to which the Company is a party) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled principal repayment or scheduled maturity, except a payment, scheduled purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund payment obligation, principal installment or maturitythe Stated Maturity thereof, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)in each case, except in any case out due within one year of the proceeds date of Permitted Refinancing Indebtednesssuch payment, purchase, redemption, defeasance or other acquisition; or (4) make any Restricted Investment; Investment (all such payments or and other actions described set forth in these clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (I1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus (c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus (d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; (4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period; (6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise; (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer; (8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or (9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared continuing or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall would be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) caused thereby. The amount of all Restricted Payments (other than cash) will be the Fair Market Value fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. . The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (dexcluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) In computing Consolidated Net Income under paragraph or (a8)) abovethe Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall will be permitted to rely divide or classify (or later divided or classify or reclassify in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of whole or in part in its sole discretion) such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance any manner that complies with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 4 contracts

Samples: Fourth Supplemental Indenture (Whiting Petroleum Corp), Fifth Supplemental Indenture (Whiting Petroleum Corp), First Supplemental Indenture (Whiting Petroleum Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary its Subsidiaries to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders in respect of, any shares of the Company’s or any Subsidiary’s Capital Stock of the Company or any Restricted Subsidiary (other than excluding dividends or distributions payable solely in shares of Qualified the Company’s Capital Stock of the Company or in options, warrants or other rights to purchase Qualified such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any Person other than the Company);Company or any of its Wholly Owned Subsidiaries; or (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company and except for investments in Capital Stock of entities which are or become Affiliates as a result of the Company’s ownership of equity interests in such entities) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted InvestmentStock; (such payments or any other actions described in clauses (i) through and (ivii) above being are collectively referred to as “Restricted Payments”), ) unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution): (IA) no Default or Event of Default shall have occurred and be continuing; ; (IIB) the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under the provisions of Section 4.09(a) hereof4.05; and and (IIIC) the aggregate amount of all Restricted Payments (other than Restricted Payments permitted by Section 4.06(b)(iv), (v), (vii) and (viii)) declared or made after January 1, 2004 shall 2014 (including the proposed Restricted Payment) does not exceed the sum (without duplication) of the followingof: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 3 contracts

Samples: Indenture (Amc Entertainment Holdings, Inc.), Indenture (Amc Entertainment Holdings, Inc.), Indenture (Amc Entertainment Inc)

Limitation on Restricted Payments. (a) The Company shall notwill not make, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actionsmake, any Restricted Payment, unless: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or immediately after giving effect to such Restricted Payment; (IIb) immediately after giving pro forma effect to such Restricted Payment, the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) hereof4.10; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Existing Notes Issue Date does not exceed the sum of (without duplication) of the following:): (A1) 50100% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to Cumulative EBITDA minus 1.4 times the date of such proposed Restricted Payment (or, if such Company’s Cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)Interest Expense; plus (B2) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value of securities or other property received by the Company, or the Fair Market Value of Property other than cash, received after January 1, 2004 by 2001, from (a) the Company from the issuance issue or sale of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock or Capital Stock of the Company or issued to any options, warrants or rights to purchase such shares of Qualified Capital Stock Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus (C3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company net reductions in Investments (other than from reductions in Permitted Investments) in any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries Person resulting from payments of interest on Indebtedness, dividends, repayments of loans loans, partial or advancestotal releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or other transfers from designations of assetsUnrestricted Subsidiaries as Restricted Subsidiaries, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in at the definition of “Investment”)fair market value thereof, not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1Person. For purposes of determining under this clause (c) the amount expended for Restricted Payments, 2004. (b) cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and in good faith. Notwithstanding paragraph (a) abovethe foregoing, the Company and its any of the Restricted Subsidiaries may take pay any dividend or make any distribution to the following actions so long as (Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the Parent’s Capital Stock, in the case of clauses each such dividend or distribution by the Company or any of the Restricted Subsidiaries constituting a Restricted Payment, to the extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (3or any successor provision) and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, with such dividend to be paid or distribution to be made as and when determined by the Parent, whether during or after the end of the relevant taxable year; provided, however, that (i) at the time of, and after giving effect to, any such dividend or distribution, no Event of Default under Section 6.01(1), (42) (without giving effect to the grace period set forth therein), (56) and or (7) below) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof and the obligations in respect of the notes shall not otherwise have been accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted during the pendency of any single Event of Default. The provisions of this Section 4.11 shall not prohibit: (1i) the payment of any dividend on any Capital Stock of the Company distribution within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied payment would comply with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date this Indenture; provided, however, that in calculating the aggregate amount of declaration Restricted Payments for purposes of any Section 4.11(c), such amounts declared shall be included in the calculation required by but such amounts expended shall be excluded from the provisions of paragraph (a) above)calculation; (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryIndebtedness of the Company which is subordinated or pari passu in right of payment to the Notes by conversion into, or by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, however, that the amount of any such Net Proceeds that are utilized for any such retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation; (iii) the redemption or retirement of Indebtedness of the Company which is subordinated in right of payment to the Notes in exchange for, by conversion into, or out of the Net Cash Proceeds of, a substantially concurrent issue and sale or incurrence of Indebtedness (it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the Company (other than any Indebtedness owed to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; (4) the repurchasethat is, redemption, repayment, defeasance or other acquisition or retirement for value contractually subordinated in right of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated payment to the Notes to at least to the same extent as such Subordinated the subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired being redeemed or retired, retired and (cx) such new has a Stated Maturity no earlier than the final maturity date of the Indebtedness being redeemed or retired and (y) has an Average Life to Stated Maturity that is longer equal to or greater than the remaining Average Life to Stated Maturity of the Notes and Indebtedness being redeemed or retired; provided, however, that the amount of any such new Indebtedness has a Stated Maturity Net Proceeds that are utilized for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; any such redemption or retirement shall be excluded from clause (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (ac)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c) amounts expended pursuant to this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (biii) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived excluded from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.calculation;

Appears in 3 contracts

Samples: Indenture (Lamar Media Corp/De), Indenture (Lamar Media Corp/De), Indenture (Lamar Media Corp/De)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or options to purchase or acquire shares of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled redemption or repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any other than intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out and/or the Guarantors which Indebtedness was permitted to be incurred pursuant to clause (6) or (7) of the proceeds definition of "Permitted Refinancing Indebtedness"); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a "Restricted Payments”), unless Payment") if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment:thereto, (Ii) no a Default or an Event of Default shall have occurred and be continuing;; or (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with paragraph (a) of Section 4.09(a) 4.9 hereof; andor (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of including such proposed Restricted Payment Payment) made subsequent to the Issue Date (orthe amount expended for such purposes, if such Consolidated Net Income shall be a lossother than in cash, minus 100% being the fair market value of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included property as determined in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved good faith by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (aCompany) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to shall exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of:

Appears in 3 contracts

Samples: Indenture (Dole Food Co Inc), Indenture (Dole Food Co Inc), Indenture (Dole Food Company Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take any of the following actions:actions (each, a “Restricted Payment”): (1i) declare or pay any dividend on, or make any other payment or distribution with respect to holders ofany of the Company’s or any Restricted Subsidiary’s Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary (other than dividends dividends, payments or distributions (x) payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company or in options, warrants (y) to the Company or other rights to purchase Qualified Capital Stock of the Companya Restricted Subsidiary)); (2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock of merger or consolidation involving the Company or any Affiliate thereof (other than Restricted Subsidiary) any Wholly Owned Restricted Subsidiary Equity Interests of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) call for redemption or make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturitythe Stated Maturity thereof, any Subordinated Indebtedness except (excluding any a) in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, purchase or other acquisition, or (b) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiariespermitted to be Incurred pursuant to Section 4.03(b)(6), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment (other than a Permitted Investment); (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)unless, unless at the time of and after giving pro forma effect to the proposed such Restricted Payment: (I1) (x) in the case of an Investment (other than a Permitted Investment), no Default or Specified Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared continuing or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary would occur as a Restricted Subsidiary consequence thereof, and (valued in each case as provided in the definition of “Investment”), not to exceed y) in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1Payment, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall will have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration continuing or would occur as a consequence thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment Company could Incur $1.00 of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company;additional Indebtedness as Ratio Debt; and (3) the repurchasesuch Restricted Payment, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of together with the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined all other Restricted Payments made by the Company as necessary to accomplish such refinancingand the Restricted Subsidiaries after April 1, plus the amount of expenses of the Company incurred in connection with such refinancing, 2021 (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other including Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in permitted by clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Section 4.04(b), but excluding all other Restricted Payments under clause (3) of paragraph (apermitted by Section 4.04(b). (c) The amount of all Restricted Payments (other ), is less than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiarysum, as the case may bewithout duplication, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.of:

Appears in 3 contracts

Samples: Indenture (Cogent Communications Holdings, Inc.), Indenture (Cogent Communications Holdings, Inc.), Indenture (Cogent Communications Holdings, Inc.)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectlyindirectly (each of the actions set forth in clauses (i), take the following actions:(ii), (iii) and (iv) below being referred to as a “Restricted Payment”): (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or options to purchase or acquire shares of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified such Capital Stock of or warrants, rights or options owned by the Company solely in shares of Qualified Capital Stock or any Restricted Subsidiary of the Company); (3iii) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment:thereto, (Ia) no a Default or an Event of Default shall have occurred and be continuing;; or (IIb) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.04(a); andor (IIIc) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1subsequent to the Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the fair market value of such property as determined in good faith by the Board of Directors of the Company) shall not exceed the sum (without duplication) of the followingof: (Ai) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company from ___________ to the date the Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); plus (Bii) 100% of the aggregate Net Cash Proceeds, net cash proceeds (or the Fair Market Value fair market value of Property any marketable securities or other than cash, property) received after January 1, 2004 by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to ___________ and on or sale prior to the Reference Date of (1) Qualified Capital Stock of the Company, (2) warrants, options or other rights to acquire Qualified Capital Stock of the Company (but excluding any debt security that is convertible into, or exchangeable for, Qualified Capital Stock) or (3) convertible or exchangeable Disqualified Capital Stock or debt securities that have been converted or exchanged in accordance with their terms for Qualified Capital Stock; plus (iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate net cash proceeds (or the fair market value of any marketable securities or other property) from any equity contribution received by the Company from a holder of the Company’s Capital Stock subsequent to ___________ and on or prior to the Reference Date; plus (iv) without duplication, the sum of: (A) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to ___________ whether through interest payments, principal payments, dividends or other distributions or payments; (B) the net cash proceeds received by the Company or any of its Restricted Subsidiaries from the disposition of all or any portion of such Investments (other than to a Restricted Subsidiary of the Company); and (C) upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary; provided, however, that the sum of clauses (A), (B) and (C) above shall not exceed the aggregate amount of all such Investments made subsequent to the Issue Date. (b) Notwithstanding the foregoing, the provisions of paragraph (a) of this Section 4.02 do not prohibit: (i) the payment of any dividend within 60 days after the date of its declaration of such dividend if the dividend would have been permitted on the date of declaration; (ii) the redemption, repurchase, purchase, retirement, defeasance or other acquisition of any shares of Capital Stock of the Company, either (A) solely in exchange for shares of Qualified Capital Stock of the Company or (B) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Restricted SubsidiariesSubsidiary of the Company) of shares of Qualified Capital Stock of the Company Company, provided that such net proceeds are not included in the calculation described in clause (c) of the preceding paragraph; (iii) the redemption, repurchase, retirement, defeasance or other acquisition of any options, warrants or rights to purchase such Subordinated Indebtedness either (A) solely in exchange for shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or (B) through the Fair Market Value application of Property other than cash, received after January 1, 2004 by the Company net proceeds of a substantially concurrent sale for cash (other than from any to a Restricted Subsidiary of its Restricted Subsidiariesthe Company) upon the exercise of any options, warrants or rights to purchase (I) shares of Qualified Capital Stock of the Company; plusCompany or (II) Refinancing Indebtedness provided that such net proceeds are not included in the calculation described in clause (c) of the preceding paragraph; (Div) the aggregate Net Cash Proceeds received after January 1so long as no Default or Event of Default shall have occurred and be continuing redemption, 2004 repurchase, retirement, defeasance or other acquisition by the Company of Common Stock of the Company from officers, directors and employees of the issuance Company or sale (other than to any of its Restricted Subsidiaries) Subsidiaries or their authorized representatives upon the death, disability or termination of Indebtedness employment of such employees or shares termination of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock their seat on the board of the Company, together with the in an aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), amount not to exceed the sum of (x) $250,000 plus (y) $100,000 in any calendar year since the case of Issue Date, with any Unrestricted Subsidiary unused amounts in such calendar year being carried forward to the total next succeeding calendar year; provided that the aggregate amount of Investments repurchases that may be made pursuant to this clause (other than Permitted Investments4) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries any calendar year shall not exceed $250,000 in such Unrestricted Subsidiary after January 1, 2004.any calendar year; (bv) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,0006.0 million; (vi) repurchases of Qualified Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible or exchangeable securities to the extent such Qualified Capital Stock represents a portion of the exercise price of those stock options, warrants or other convertible or exchangeable securities; (vii) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Capital Stock on a pro rata basis; (viii) the repurchase of Capital Stock deemed to occur upon the exercise of stock options to the extent such Capital Stock represents a portion of the exercise price of those stock options; (ix) payments of cash in lieu of issuing fractional shares upon (i) the exercise of options or warrants or (ii) the exchange or conversion of Qualified Capital Stock of any such Person; and (x) the declaration and The actions described in clauses (1), (3), (4) and (6) payment of this paragraph (b) shall be dividends to holders of any class or series of Disqualified Capital Stock of the Company or any Preferred Stock of any Restricted Payments that shall be permitted to be made Subsidiary incurred in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determinationSection 4.04. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would Payment, in the good faith determination of the Company Board of Directors of the Company, would be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments adjustment made in good faith to the Company’s financial statements affecting Consolidated Net Income Income. In determining the aggregate amount of Restricted Payments made subsequent to the Company for any periodIssue Date in accordance with clause (c) of Section 4.02(a), amounts expended pursuant to clauses (i), (ii)(B), (iii)(B)(II) and (iv) shall be included in such calculation.

Appears in 3 contracts

Samples: Third Supplemental Indenture (General Finance CORP), Second Supplemental Indenture (General Finance CORP), Second Supplemental Indenture (General Finance CORP)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any distribution on account of Equity Interests, other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary than (other than A) dividends or distributions payable solely in shares Equity Interests (other than Disqualified Stock) of Qualified Capital Stock the Company; or (B) dividends or distributions payable to the Company or a Wholly Owned Subsidiary of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)that is a Restricted Subsidiary; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (other than any such Equity Interests owned by the Company or a Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Companythat is a Restricted Subsidiary); (3iii) make any principal payment on or repurchasepurchase, redeem, repay, defease or otherwise acquire or retire for value, prior value any Indebtedness that is subordinated in right of payment to any the Notes except for regularly scheduled payments of interest when due or payment of principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; orat maturity thereof; (4iv) make any Restricted Investment (other than a Permitted Investment); (all such payments or and other actions described set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"); unless, unless at the time of and after giving effect to the proposed such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Coverage Ratio test set forth in Section 4.11; and (C) such Restricted Payment (the amount of any such payment, if other than cash, to be determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a resolution in an Officers' Certificate delivered to the Trustee), together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this Indenture (including Restricted Payments permitted by the next succeeding paragraph, except as set forth therein), shall not exceed the sum of (w) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) commencing on the first day of the Company's first fiscal quarter beginning after the initial issuance of the Notes and ending on the last day of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, 100% of such deficit as a negative number), plus (x) 100% of the aggregate net cash proceeds received by the Company from the issuance or sale since the date of initial issuance of the Notes of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus (y) the aggregate cash received by the Company as capital contributions to the Company after the date of initial issuance of the Notes (other than from a Subsidiary), plus (z) any cash received by the Company after the date of initial issuance of the Notes as a dividend or distribution from any of its Unrestricted Subsidiaries or from the sale of any of its Unrestricted Subsidiaries less the cost of disposition and taxes, if any (but in each case excluding any such amounts included in Consolidated Net Income). (b) The foregoing provisions shall not prohibit: (i) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; (ii) the redemption, repurchase, retirement or other acquisition of any Equity Interests of the Company, or the defeasance, redemption or repurchase of subordinated Indebtedness in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of Equity Interests of the Company (other than any Disqualified Stock) or out of the net proceeds of a substantially concurrent cash capital contribution received by the Company; provided that the amount of any such proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from Section 4.2(a)(C)(x); (iii) the repayment, defeasance, redemption or repurchase of subordinated Indebtedness with the net proceeds from an incurrence of Refinancing Indebtedness in a Permitted Refinancing; (iv) any Investment made with the proceeds of a substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of Capital Stock of the Company (other than Disqualified Stock); provided, however, the proceeds of such sale shall not be (and have not been) included in Section 4.12(a)(C) hereof; (v) other restricted payments of up to $5,000,000 in the aggregate; (vi) the payment of a dividend or distribution by the Company and its Subsidiaries, directly or indirectly, to ACP Holding in an amount sufficient to permit ACP Holding to pay its consolidated, combined or unitary United States federal, state and local tax liabilities relating to the business of the Company and its Subsidiaries, provided that ACP Holding applies the amount of such dividend or distribution for such purpose at such time; or (vii) payments by the Company to NFC Castings or ACP Holding not to exceed an amount necessary to permit NFC Castings or ACP Holding to (A) make payments in respect to its indemnification obligations owing to directors, officers, or other Persons under NFC Castings' or ACP Holding's charter or by-laws or pursuant to written agreements with any such Person, (B) make payments in respect of its other operational expenses (other than taxes) incurred in the ordinary course of business, or (c) make payments in respect of indemnification obligations and costs and expenses incurred by ACP Holding in connection with any offering of common stock of ACP Holding; or (viii) distributions by the Company and the Restricted Subsidiaries in amounts necessary to permit such Person to repurchase securities of such Person from employees of such Person upon the termination of their employment, so long as the aggregate cash amount of all such Distributions by all such Persons, measured at the time when made, does not exceed $250,000 in any fiscal year of the Company. provided, further, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (i), (ii) - (iii), (v) and (viii) no Default or Event of Default shall have occurred and be continuing; ; provided, further, that the Restricted Payments described in clauses (IIvi) the Company could incur $1.00 of additional Indebtedness and (vii), shall not be counted in accordance with Section 4.09(a) hereof; and (III) computing the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) pursuant to this Indenture. For purposes of the following: (A) 50% foregoing calculations, the amount of the Consolidated Net Income of the Company accrued on any Investment that constitutes a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior Restricted Payment shall be equal to the date greater of (i) the net book value of such proposed Restricted Payment Investment and (or, if such Consolidated Net Income shall be a loss, minus 100% ii) the fair market value of such loss); plus Investment (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in certified by a resolution of the definition independent directors of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its if the book value or fair market value of such investment exceeds $1,000,000). Not later than the date of making any Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) abovePayment, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary deliver to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for Trustee an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity Officers' Certificate stating that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in is permitted and setting forth the good faith determination of basis upon which the Company calculations required by this Section 4.12 were computed, which calculations may be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to based upon the Company’s 's latest available financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 2 contracts

Samples: Indenture (Neenah Foundry Co), Indenture (Neenah Foundry Co)

Limitation on Restricted Payments. (a) The the Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take indirectly (the payments and other actions described in the following actions:clauses of this Section 4.06(a) being collectively called “Restricted Payments”): (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary on its Equity Interests (other than dividends or distributions payable solely paid in shares of the Company’s Qualified Capital Stock of Equity Interests) held by Persons other than the Company or in options, warrants or other rights to purchase Qualified Capital Stock any of the Company)its Restricted Subsidiaries; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (held by Persons other than the purchase, redemption, acquisition Company or retirement any of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)its Restricted Subsidiaries; (3iii) make any principal payment on or repurchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value, prior or make any payment on or with respect to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Debt (excluding any intercompany Indebtedness between or other than among the Company and any of its Restricted Subsidiaries or any Restricted Subsidiary and any other Restricted Subsidiaries), ) except in any case out payments of the proceeds of Permitted Refinancing Indebtednessinterest and principal at Stated Maturity; or (4iv) make any Restricted Investment other than a Permitted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)unless, unless at the time of of, and after giving effect to to, the proposed Restricted Payment: (I1) no Default or Event of Default shall have has occurred and be continuing;is continuing or would occur as a consequence of such Restricted Payment, (II2) the Company at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable period could incur Incur at least $1.00 of additional Indebtedness in accordance with Debt under Section 4.09(a) hereof; 4.05(a), and (III3) the aggregate amount of expended by the Company and its Restricted Subsidiaries for all Restricted Payments declared or made after January 1March 26, 2004 shall not would not, subject to paragraph (c), exceed the sum (without duplication) of the followingof: (A) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company amount of the loss) accrued on a cumulative basis during the period period, taken as one accounting period, beginning on January 1, 2004 the first day of the fiscal quarter in which the Issue Date occurs and ending on the last day of the Company’s last most recently completed fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)for which internal financial statements are available; plus (B) subject to paragraph (c), the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any a Subsidiary) after the Issue Date: (i) from the issuance and sale of its Restricted Subsidiaries) upon Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted into Qualified Equity Interests of the Company (but excluding any Qualified Equity Interests to the extent issued in or in connection with the proposed exchange offer or offering described in the Form S-4), provided that amounts received by Parents as payments of the applicable exercise price of any options, warrants or rights options issued in connection with the proposed exchange offer shall be included, or (ii) as a contribution to purchase shares of Qualified Capital Stock of the Companyits common equity; plus (DC) an amount equal to the aggregate Net Cash Proceeds received after January 1sum, 2004 by the Company from the issuance or sale (other than to any of its Restricted for all Unrestricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock , of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingfollowing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Foster Wheeler Inc), Indenture (Foster Wheeler LTD)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectly, take declare, order, pay, make or set apart any sum for any Restricted Payment; provided that the following actionsforegoing shall not prohibit: (1a) declare Restricted Payments made to the Company or pay any dividend onGuarantor, or make by any other distribution Subsidiary that is not a Guarantor on a pro rata basis to the holders of, any shares of its Capital Stock; (b) the repurchase of Capital Stock of the Company deemed to occur upon the exercise of options or any warrants to the extent that such Capital Stock represents all or a portion of the exercise price; (c) Restricted Subsidiary (other than dividends or distributions payable solely in shares Payments constituting the repurchase of Qualified Capital Stock of the Company or or, after the Conversion, the Parent, constituting fractional shares, in options, warrants or other rights to purchase Qualified Capital Stock of the Company)an aggregate amount not exceeding $100,000 per Fiscal Year; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3d) the repurchase, redemption or other acquisition or retirement for value of any shares Capital Stock of the Company or, after the Conversion, the Parent, held by any current or former employee, consultant or director of the Company or, after the Conversion, the Parent, or any of its Subsidiaries pursuant to the terms of any class employee equity subscription agreement, stock option agreement or similar agreement approved by a majority of the disinterested members of the Board of Directors of the Company, or, after the Conversion, the Parent, in an aggregate amount not exceeding $500,000 per Fiscal Year; (e) Restricted Payments, to holders of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant prior to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancingConversion Date, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time40% of the taxable income allocable to such Holders solely with respect to their ownership interest in the Company for the period from January 1, 2006 to the proceeds of which are used solely (a) to purchase common stock Conversion Date and otherwise in accordance with the terms of the Company LLC Agreement as in connection with a restricted stock or employee stock purchase planeffect on the date hereof, or and other Restricted Payments, if any, to exercise stock options received pursuant such holders required to be made under the terms of the Company LLC Agreement as in effect on the date hereof; and (f) after the Conversion Date, Restricted Payments to the Parent in an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock optionsamount required by the Parent to pay any consolidated, combined or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date unitary Taxes of the Restricted Payment Company and/or any of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to its Subsidiaries that are due and payable within 10 days of the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Purchase Agreement (NextWave Wireless LLC), Purchase Agreement (NextWave Wireless LLC)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiary Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company or in options, warrants payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation to which the Company is a party) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled principal repayment or scheduled maturity, except a payment, scheduled purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund payment obligation, principal installment or maturitythe Stated Maturity thereof, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)in each case, except in any case out due within one year of the proceeds date of Permitted Refinancing Indebtednesssuch payment, purchase, redemption, defeasance or other acquisition; or (4) make any Restricted Investment; Investment (all such payments or and other actions described set forth in these clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (I1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus (c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus (d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice or redemption, as the case may be, would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; (4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period; (6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise; (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer; (8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or (9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared continuing or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall would be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) caused thereby. The amount of all Restricted Payments (other than cash) will be the Fair Market Value fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. . The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (dexcluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) In computing Consolidated Net Income under paragraph or (a8)) abovethe Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall will be permitted to rely divide or classify (or later divided or classify or reclassify in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of whole or in part in its sole discretion) such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance any manner that complies with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 2 contracts

Samples: Third Supplemental Indenture (Whiting Petroleum Corp), First Supplemental Indenture (Whiting Petroleum Corp)

Limitation on Restricted Payments. (a) The Company shall notnot make, and shall not permit any Restricted Subsidiary toto make, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless Payment if at the time of of, and after giving effect to the to, such proposed Restricted Payment:, (Ia) no a Default or Event of Default shall have occurred and be continuing;, (IIb) the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with Debt pursuant to clause (1) of the first paragraph of Section 4.09(a) hereof; and4.03, or (IIIc) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made after January 1since the Issue Date (the amount of any Restricted Payment, 2004 shall not if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the sum of: (without duplication1) of the followingresult of: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1Cumulative EBITDA, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plusminus (B) the aggregate Net Cash product of 1.5 and Cumulative Interest Expense, plus (2) Capital Stock Sale Proceeds, or plus (3) the Fair Market Value of Property other than cash, aggregate net cash proceeds received after January 1, 2004 by the Company or any Restricted Subsidiary from the issuance or sale (other than to any after the Issue Date of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company convertible or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock exchangeable Debt that have has been converted into or exchanged for Qualified Capital Stock (other than Disqualified Stock) of the Company or any direct or indirect parent holding company of the Company, together with excluding (x) any such Debt issued or sold to the aggregate cash received Company or a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company at or any such Subsidiary for the time benefit of their employees, and (y) the aggregate amount of any cash or other Property distributed by the Company or any Restricted Subsidiary upon any such conversion or exchange; , plus (E4) an amount equal to the extent not otherwise included in Consolidated Net Income, sum of: (A) the net reduction in Investments in Unrestricted Subsidiaries any Person other than the Company or a Restricted Subsidiary resulting from dividends, repayments of loans or advances, advances or other transfers of assetsProperty, in each case to the Company or a any Restricted Subsidiary after January 1from such Person, 2004 from any less the cost of the disposition of such Investment, plus (B) the portion (proportionate to the Company's equity interest in such Unrestricted Subsidiary or from Subsidiary) of the redesignation Fair Market Value of the net assets of an Unrestricted Subsidiary as at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary Subsidiary; provided, however, that the sum in this clause (valued in each case as provided in the definition of “Investment”)4) shall not exceed, not to exceed in the case of any Unrestricted Subsidiary Person, the total amount of Investments previously made (other than Permitted Investmentsand treated as a Restricted Payment) in such Unrestricted Subsidiary made by the Company and its or any Restricted Subsidiaries Subsidiary in such Unrestricted Subsidiary after January 1Person. Notwithstanding the foregoing limitation, 2004. (b) Notwithstanding paragraph the Company may take any action if it is in compliance with any of the following clauses (a) abovethrough (h): (a) pay dividends on its Capital Stock within 60 days of the declaration thereof if, on such declaration date, such dividends could have been paid in compliance with this Indenture; provided, however, that at the Company and its Restricted Subsidiaries may take the following actions so long as (in the case time of clauses (3)such payment of such dividend, (4), (5) and (7) below) no other Default or Event of Default shall have occurred and be continuing: continuing (1) or result therefrom); provided further, however, that such dividend shall be included in the payment of any dividend on any Capital Stock calculation of the Company within 60 days after the date amount of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)Restricted Payments; (2b) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the purchase, repurchase, redemption redeem, legally defease, acquire or other acquisition or retirement of any shares of any class of retire for value Capital Stock of the Company or any Restricted Subsidiary, Subordinated Obligations in exchange for, or out of the aggregate Net Cash Proceeds proceeds of the substantially concurrent sale of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees); provided, however, that: (41) the such purchase, repurchase, redemption, repaymentlegal defeasance, defeasance or other acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments, and (2) the Capital Stock Sale Proceeds from such exchange or sale shall be excluded from the calculation pursuant to clause (c)(2) above; (c) purchase, repurchase, redeem, legally defease, acquire or retire for value of any Subordinated Indebtedness Obligations in exchange for, or out of the aggregate Net Cash Proceeds from, a proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of, Permitted Refinancing Debt; provided, however, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the Companyamount of Restricted Payments; (5d) make a Restricted Payment, if at the purchasetime the Company or any Restricted Subsidiary first Incurred a commitment for such Restricted Payment, redemptionsuch Restricted Payment could have been made; provided, repaymenthowever, defeasance that all commitments Incurred and outstanding shall be treated as if such commitments were Restricted Payments expended by the Company or other acquisition a Restricted Subsidiary at the time the commitments were Incurred, except that commitments Incurred and outstanding that are treated as a Restricted Payment expended by the Company or retirement for value a Restricted Subsidiary and that are terminated shall no longer be treated as a Restricted Payment expended by the Company or a Restricted Subsidiary upon the termination of Subordinated Indebtedness such commitment; (other than Disqualified Capital Stocke) in exchange forrepurchase shares of, or out of the aggregate net cash proceeds options to purchase shares of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness common stock of the Company so long as or any of its Subsidiaries (a) or pay dividends on its Capital Stock for the principal amount purpose of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired enabling any direct or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses indirect parent company of the Company incurred in connection with such refinancingto repurchase shares of, (bor options to purchase shares of, its common stock) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired from current or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to former officers, directors or employees of the Company or any Restricted Subsidiary of its Subsidiaries or any direct or indirect parent holding company of the Company (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company in an or such parent holding company under which such individuals purchase or sell, or are granted the option to purchase or sell, shares of such common stock; provided, however, that: (1) the aggregate amount of such repurchases (or such dividends made to facilitate such repurchases) shall not to exceed $1,000,000 outstanding 3.0 million in any calendar year, although any unused amount in any calendar year may be carried forward to one or more future calendar years, and (2) at the time of such repurchase (or such dividends made to facilitate such repurchases), no other Default or Event of Default shall have occurred and be continuing (or result therefrom); provided further, however, that such repurchases (or such dividends made to facilitate such repurchases) shall be included in the calculation of the amount of Restricted Payments; (f) make Investments in any one timePerson, provided that the proceeds Fair Market Value thereof, measured on the date each such Investment was made or returned, as applicable, when taken together with all other Investments made pursuant to this clause (f), does not exceed the sum of which are used solely $50.0 million, plus the aggregate amount of the net reduction in Investments in any Person made pursuant to this clause (af) on and after the Issue Date resulting from dividends, repayments of loans or other transfers of Property, in each case to purchase common stock the Company or any Restricted Subsidiary from such Person, except to the extent that any such net reduction amount is included in the amount calculated pursuant to clause (c) of the preceding paragraph or any other clause of this paragraph; provided, however, that at the time of such Investment, no other Default or Event of Default shall have occurred and be continuing (or result therefrom); provided further, however, that such Investment shall be included in the calculation of the amount of Restricted Payments; (g) make payments to any direct or indirect parent holding company of the Company in connection with a restricted stock or employee stock purchase planfor legal, or audit and other expenses directly relating to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price administration of such stock optionsparent holding company, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6)which payments do not exceed $2.0 million in any fiscal year; and (7h) other Restricted Payments make direct or indirect payments to Alamosa Holdings, Inc. (together with any successor thereof, "Parent") in an aggregate amount not amounts necessary to exceed $10,000,000; and The actions described in clauses enable Parent to make cash dividend payments with respect to either (1), (3), (4i) and (6) the shares of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or Series B Convertible Preferred Stock issued by the Company or such Restricted Subsidiary, as the case may be, Parent pursuant to the Restricted Payment. Exchange Offers (dor any securities issued in exchange therefor) In computing Consolidated Net Income under paragraph or (a) above, (1ii) the Company shall use audited financial statements for the portions shares of the relevant period for which audited financial statements are available Series C Convertible Preferred Stock of Parent (or any securities issued in exchange therefor) issued by Parent as dividends on the date shares of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodeither Series B Convertible Preferred Stock or Series C Convertible Preferred Stock.

Appears in 2 contracts

Samples: Indenture (Alamosa Holdings Inc), Indenture (Alamosa Holdings Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or options to purchase or acquire shares of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled redemption or repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any other than intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out and/or the Guarantors which Indebtedness was permitted to be incurred pursuant to clause (6) or (7) of the proceeds definition of "Permitted Refinancing Indebtedness"); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a "Restricted Payments”), unless Payment") if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment:thereto, (Ii) no a Default or an Event of Default shall have occurred and be continuing;; or (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with paragraph (a) of Section 4.09(a) 1014 hereof; andor (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of including such proposed Restricted Payment Payment) made subsequent to the Issue Date (orthe amount expended for such purposes, if such Consolidated Net Income shall be a lossother than in cash, minus 100% being the fair market value of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included property as determined in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved good faith by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (aCompany) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to shall exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of:

Appears in 2 contracts

Samples: Second Supplemental Indenture (Dole Food Co Inc), Second Supplemental Indenture (Dole Food Company Inc)

Limitation on Restricted Payments. (a) The Except as otherwise provided in this Section 1009, the Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: make any Restricted Payment if (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the such proposed Restricted Payment: (I) no , a Default or Event of Default shall have occurred and be continuing; continuing or shall occur as a consequence of such Restricted Payment, (II2) the Company could incur would, at the time of such Restricted Payment and after giving pro forma effect thereto, have been prohibited from incurring at least $1.00 of additional Indebtedness pursuant to the Cash Flow Ratio test in accordance with Section 4.09(a1007(a) hereof; and or (III3) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or that shall have been made after January 1since June 30, 2004 shall not 2011 would exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior $100.0 million plus an amount equal to the date difference between (i) the Cumulative Cash Flow Credit and (ii) 1.4 multiplied by Cumulative Interest Expense. For purposes of such proposed this Section 1009, the amount of any Restricted Payment (orPayment, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the shall be based upon Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Value. (b) Notwithstanding paragraph Clause (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default this Section 1009 shall have occurred and be continuingnot prevent: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date such declaration payment complied with the provisions of paragraph clause (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Section 1009; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the CompanyPermitted Affiliate Payments; (3) the repurchaseretirement, redemption redemption, purchase, defeasance or other acquisition or retirement of any shares of any class of the Company’s Capital Stock or warrants, rights or options to acquire Capital Stock of the Company or any Restricted SubsidiaryCompany, in exchange for, or out of the aggregate Net Cash Proceeds proceeds of a sale (within one year before or 180 days after such retirement, redemption, purchase, defeasance or other acquisition) of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified the Company’s Capital Stock or warrants, rights or options to acquire Capital Stock of the Company; (4) the payment of any dividend by a Restricted Subsidiary to the holders of its common Equity Interests on a pro rata basis; (5) repurchases of Equity Interests in a cashless transaction deemed to occur upon exercise or vesting of restricted stock, stock options or warrants; (6) the payment of cash in lieu of the issuance of fractional shares or scrip in connection with the exercise of warrants, options or other securities convertible into or exercisable for Capital Stock of the Company; (7) the repurchase, redemption, repayment, defeasance retirement or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchaseCompany held by any future, redemption, repayment, defeasance present or other acquisition former employee or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees director of the Company or any of its Restricted Subsidiary approved by Subsidiaries or the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one timeestate, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock heirs or employee stock purchase planlegatees of, or to exercise stock options received any entity controlled by, any such employee or director, pursuant to an employee any management equity plan or director stock option plan or any other incentive plan, management or employee benefit plan or agreement in a principal amount not to exceed connection with the exercise price termination of such stock optionsperson’s employment for any reason (including by reason of death or disability); provided, or (b) to refinance loanshowever, together with accrued interest thereon, that the aggregate Restricted Payments made pursuant to item (a) of under this clause (6); and7) does not exceed in any calendar year the sum of (A) $1.5 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $5.0 million in any calendar year) and (B) the cash proceeds of key man life insurance policies on the life of any such person received by the Company and its Restricted Subsidiaries after the date of this Indenture; (78) any Restricted Payment so long as immediately after the making of such Restricted Payment, the Cash Flow Ratio does not exceed 3.25:1.00; or (9) other Restricted Payments made in connection with the Transactions. For purposes of determining the aggregate permissible amount of Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph Section 1009(a), all amounts expended pursuant to Section 1009(b)(1) shall be included and all amounts expended or received pursuant to Sections 1009(b)(2) through (a9) (provided shall be excluded; provided, however, that any dividend amounts paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (bSection 1009(b)(1) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant included only to the extent that such amounts were not previously included in calculating Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determinationPayments. If the Company or a Restricted Subsidiary makes a Restricted Payment which, that at the time of the making of such Restricted Payment Payment, would be in the Company’s good faith determination of the Company be permitted under the requirements of this IndentureSection 1009, such Restricted Payment shall be deemed to have been made in compliance with this Indenture Section 1009 notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company calculations set forth above for any period. For the purposes of this Section 1009, the net proceeds from the issuance of shares of the Company’s Capital Stock upon conversion of Indebtedness shall be deemed to be an amount equal to the accreted value of such Indebtedness on the date of such conversion and the additional consideration, if any, the Company receives upon such conversion, minus any cash payment on account of fractional shares (such consideration, if in property other than cash, to be determined by the Company’s Board of Directors, whose good faith determination shall be conclusive).

Appears in 2 contracts

Samples: Indenture (AMC Networks Inc.), Indenture (WE TV Studios LLC)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany other than the purchase, repurchase or other acquisition of Subordinated Indebtedness between in anticipation of satisfaction of a sinking fund payment or among the Company and any of its Restricted Subsidiaries)final maturity, except in any each case out within six months of the proceeds due date of Permitted Refinancing Indebtednesssuch sinking fund obligation or final maturity); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a "Restricted Payments”Payment"), unless ; if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment:thereto, (Ii) no a Default or an Event of Default shall have occurred and be continuing;; or (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.9; andor (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of including such proposed Restricted Payment Payment) made subsequent to the Issue Date (orthe amount expended for such purposes, if such Consolidated Net Income shall be a lossother than in cash, minus 100% being the fair market value of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included property as determined in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved good faith by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (aCompany) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to shall exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of

Appears in 2 contracts

Samples: Indenture (Davis-Standard CORP), Indenture (Davis-Standard CORP)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1a) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); ) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock, (2b) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or op- tions to purchase or acquire shares of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock Stock, or (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4c) make any Restricted Investment; Investment (such payments or other each of the foregoing actions described set forth in clauses (ia), (b) through and (ivc) above being collectively referred to as a "Restricted Payments”Payment"), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment: thereto, (Ii) no a Default or an Event of Default shall have occurred and be continuing; , (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof; and 4.12, or (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 subsequent to the Issue Date shall not exceed the sum of: (without duplication) of the following: (Aw) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); plus plus (Bx) 100% of the aggregate Net Cash Proceeds, or net proceeds received by the Fair Market Value Company (including the fair market value of Property property other than cash) from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (including Capital Stock issued upon the conversion of convertible Indebtedness or in exchange for outstanding Indebtedness); plus (y) without duplication of any amounts included in clause (iii)(x) above, 100% of the aggregate net proceeds (including the fair market value of property other than cash) of any equity contribution received after January 1, 2004 by the Company from a holder of the issuance or sale Company's Capital Stock (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes in accordance with the optional redemption provisions of the Notes) plus (z) 100% of the aggregate net proceeds (including the fair market value of property other than to cash) of any (i) sale or other disposition of Restricted Investments made by the Company and its Restricted SubsidiariesSubsidiaries or (ii) dividend from, or the sale of the stock of, an Unrestricted Subsidiary. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or notice of such redemption if the dividend or payment of the redemption price, as the case may be, would have been permitted on the date of declaration or notice; (2) if no Event of Default shall have occurred and be continuing as a consequence thereof, the acquisition of any shares of Capital Stock of the Company (the "Retired Capital Stock"), either (i) solely in exchange for shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified (the "Refunding Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”Stock"), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Therma Wave Inc), Indenture (Therma Wave Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take any of the following actions:actions (each, a "Restricted Payment"): (1) declare or pay any dividend on, or return of capital or make any other distribution to holders of, any on or in respect of shares of Capital Stock of the Company or any Restricted Subsidiary to holders of such Capital Stock, other than: (other than i) dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company), or (ii) dividends or distributions payable to the Company and/or a Restricted Subsidiary; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than Restricted Subsidiary, or any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such than Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of held by the Company solely in shares of Qualified Capital Stock of the Company)or another Restricted Subsidiary; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, as the case may be, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless if at the time of the Restricted Payment and immediately after giving effect to the proposed Restricted Paymentthereto: (IA) no a Default or an Event of Default shall have occurred and be continuing; (IIB) the Company could incur is not able to Incur at least $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a) hereof3.9(a); andor (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed (the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (oramount expended for these purposes, if such Consolidated Net Income shall be a lossother than in cash, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or being the Fair Market Value of Property other than cashthe relevant property) of Restricted Payments, including the proposed Restricted Payment, made subsequent to the Issue Date up to the date thereof, less any Investment Return calculated as of the date thereof, shall exceed the sum of: (i) fifty percent (50%) of cumulative Consolidated Net Income or, if cumulative Consolidated Net Income is a loss, minus one hundred percent (100%) of the loss, accrued during the period, treated as one accounting period, beginning on the first full fiscal quarter after the Issue Date to the end of the most recent fiscal quarter for which consolidated financial information of the Company is available; plus (ii) one hundred percent (100%) of the aggregate net cash proceeds received after January 1, 2004 by the Company from any Person from any: (a) contribution to the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock equity capital of the Company not representing an interest in Disqualified Capital Stock or any options, warrants or rights to purchase such shares (b) issuance and sale of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case case, subsequent to the Company or a Restricted Subsidiary after January 1Issue Date, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Baron Wire & Cable Corp.), Indenture (CCI International, Inc.)

Limitation on Restricted Payments. (a) The Company Parent shall not, and shall not permit any Restricted Subsidiary toor, in the case of paragraphs (3) and (4) below, the Company to take, directly or indirectly, take any of the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary Parent (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire such shares of Qualified Capital Stock of the CompanyStock); (2) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Parent or any Capital Stock of any of its Affiliates (other than Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to the Stated Maturity of any scheduled principal payment or any sinking fund payment, scheduled sinking fund payment any Indebtedness of the Parent or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and any that is expressly subordinated in right of its Restricted Subsidiaries)payment to the Notes or to the Guarantees, except in any as the case out of the proceeds of Permitted Refinancing Indebtednessmay be; or (4) make any Restricted Investment (other than any Permitted Investment) in any Person; (such payments or other actions described in (but not excluded from) clauses (i1) through (iv4) above being are collectively referred to as "Restricted Payments"), ; unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors of the Parent, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company Parent could incur at least $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) pursuant to Section 4.09(a) hereof; and 1011 and (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the followingof: (Ai) 50100% of the Consolidated Net Income Operating Cash Flow of the Company accrued Parent less 1.5 times Consolidated Interest Expense of the Parent or (ii) if Consolidated Operating Cash Flow of the Parent is a negative, minus 100% of such negative amount, in each case on a cumulative basis during for the period beginning on January 1, 2004 the first day of the Parent's first fiscal quarter after the Issue Date and ending on the last day of the Company’s Parent's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)Payment; plus (Bii) the aggregate Net Cash Proceeds, or Proceeds and the Fair Market Value of Property other than cashTelecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company Parent after the Issue Date as capital contributions or from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of shares of Qualified Capital Stock of the Company or any Parent (including upon the exercise of options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (Crights) the aggregate Net Cash Proceedsor warrants, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants options or rights to purchase shares of Qualified Capital Stock of the CompanyParent; plus (Diii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company Parent after the Issue Date from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the CompanyParent, together with the aggregate cash Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Company Parent at the time of such conversion or exchange; plus (Eiv) to the extent not otherwise included in Consolidated Net IncomeOperating Cash Flow of the Parent, an amount equal to the sum of (a) the net reduction in Investments (other than Permitted Investments) in Unrestricted Subsidiaries any Person (other than a Restricted Subsidiary) resulting from the payment in cash of dividends, repayments of loans or advances, advances or other transfers of assets, in each case to the Company Parent or a any Restricted Subsidiary after January 1, 2004 the Issue Date from such Person and (b) the amount of any Unrestricted Subsidiary or net reduction in Investments resulting from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of "Investment”)") at the time of such redesignation; provided that, not to exceed in the case of any Unrestricted Subsidiary (a) or (b) above, the foregoing sum shall not exceed the total amount of Investments (other than Permitted Investments) previously made in such Person or Unrestricted Subsidiary made by the Company Parent and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Subsidiaries. (b) Notwithstanding paragraph (a) above, the Company Parent and its any Restricted Subsidiaries Subsidiary may take the following actions so long as (in the case of with respect to clauses (3), 2) through (4), (5) and (76) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date the payment of such declaration dividend would have complied with the provisions of paragraph (a) above (and such payment shall will be deemed to have been paid on such date of declaration for purposes of any the calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, Parent (x) in exchange for, or out of the aggregate Net Cash Proceeds of, of a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of of, shares of Qualified Capital Stock of the CompanyParent; or (y) that are held by former officers, employees or directors (or their estates or beneficiaries under their estates) of the Parent or any of its Subsidiaries; provided that the aggregate amount of such purchase, redemption or other acquisition or retirement for value under this clause (y) will not exceed $250,000 (or the equivalent thereof in one or more foreign currencies) in any given fiscal year; (43) the repurchasepurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness of the Parent that is expressly subordinated in right of payment to the Notes in exchange for, or out of the aggregate Net Cash Proceeds from, of a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of of, shares of Qualified Capital Stock of the CompanyParent; (4) the purchase of any Indebtedness of the Company that is expressly subordinated in right of payment to the Notes or the purchase of any Indebtedness of the Parent that is expressly subordinated in right of payment to the Guarantees, in each case at a purchase price not greater than 101% of the principal amount thereof in the event of a Change of Control in accordance with provisions similar to Section 1010; provided that prior to such purchase the Company has made the Change of Control Offer as provided in such covenant with respect to the Notes and has purchased all Notes validly tendered for payment in connection with such Change of Control Offer; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Redeemable Capital Stock) of the Parent that is expressly subordinated in right of payment to the Notes in exchange for, or out of the aggregate net cash proceeds of, Net Cash Proceeds of a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated of, new Indebtedness of the Company Parent that is expressly subordinated in right of payment to the Notes, so long as (aA) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the lesser of (x) the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness being refinanced or (y) the amount of any premium reasonably determined by the Company Parent as necessary to accomplish such refinancing, plus plus, in either case, the amount of expenses of the Company Parent incurred in connection with such refinancing, ; (bB) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, ; and (cC) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to of the Indebtedness being refinanced and a final Stated Maturity of principal later than the final Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes;being refinanced; and (6) loans made to officers, directors or employees the payment of the Company or any Restricted Subsidiary approved by the Board cash in lieu of Directors fractional shares of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received Common Stock pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and Warrant Agreement. The actions described in clauses (1), (3), ) through (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3C) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the above. The actions described in clauses (2), clause (5) and (7) of this paragraph (b) shall be Restricted Payments that shall be permitted to be taken in accordance with this paragraph (b) and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3C) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date . SECTION 123. AMENDMENT TO SECTION 1013. Section 1013 of the Restricted Payment of Indenture is hereby amended by deleting the asset(s) or securities proposed to be transferred or issued by existing Section 1013 in its entirety and replacing it with the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.following:

Appears in 2 contracts

Samples: Supplemental Indenture (Pathnet Telecommunications Inc), Supplemental Indenture (Pathnet Telecommunications Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take make any Restricted Payment. (b) Notwithstanding the following actionsforegoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1i) declare or pay the payment of any dividend on, or make consummation of any other distribution to holders of, any shares irrevocable redemption within 60 days after the date of Capital Stock declaration of such dividend or the Company giving of a redemption notice if the dividend or redemption would have been permitted on the date of declaration or giving of notice; (ii) any Restricted Subsidiary Payments, either (other than dividends or distributions payable A) solely in exchange for shares of Qualified Capital Stock of the Company or in options(B) if no Default or Event of Default shall have occurred and be continuing or would be caused thereby, warrants or other rights to purchase Qualified Capital Stock through the application of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock net cash proceeds of the Company or any Affiliate thereof a substantially concurrent Equity Offering (other than any Wholly Owned Restricted Subsidiary to a subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock capital contribution received by the Company; (other than iii) the purchase, redemption, acquisition or retirement repayment of any Indebtedness of the Company that is subordinate or junior in right of payment to the Loans or Disqualified Capital Stock of the Company either (A) solely in exchange for shares of Qualified Capital Stock of the Company); , or (3B) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of (1) a substantially concurrent Equity Offering or (2) incurrence for cash of Refinancing Indebtedness (in the case of (1) or (2), other than to a subsidiary of the Company); (IIiv) beginning on the fifth anniversary of the date on which the 2015 Notes were issued, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, repurchases by the Company of, or dividends to Parent to permit repurchases by Parent of, Common Stock of the Company or Parent from employees, former employees, directors or former directors of the Company or any of its subsidiaries (or permitted transferees of such persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the Capital Stock of the Company from time to time at fair market value at the date of such repurchase; (v) payments to Parent for legal, audit, tax and other expenses directly relating to the administration of Parent, including customary compensation payable to the Parent’s directors and employees, not to exceed €1.5 million in any fiscal year; (vi) so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, ongoing service and management fees pursuant to the Management Agreement in an aggregate annual amount not to exceed (x) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is less than $6.0 billion (the “EBITDA Threshold”), $25.0 million and (y) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is greater than the EBITDA Threshold, $30.0 million; (vii) cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities; (viii) payments or distributions to dissenting shareholders pursuant to applicable law in connection with or in contemplation of the Acquisition or any merger, consolidation or transfer of assets that complies with Section 5.19; (ix) payments of dividends on Disqualified Capital Stock issued in accordance with Section 5.08; (x) directors’ fees (including non-executive directors of the Company) or, if the Company is a partnership, directors’ fees of the general partner of the Company in an amount not to exceed $1.5 million per year; (xi) so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of the 2015 Notes upon a Change of Control or an Asset Sale to the extent required by the indenture relating to the 2015 Notes, but only if Borrower (A) in the case of a Change of Control prior to the Initial Maturity Date, has first prepaid all Loans and Loan Notes in accordance with Section 5.10(a) hereof, (B) in the case of a Change of Control on or after the Initial Maturity Date, has first purchased each Loan of each Lender that elects to have such Loan purchased in accordance with Section 5.10(b) hereof, or (C) or in the case of an Asset Sale, has first purchased all Loans in accordance with Section 5.11(d) hereof; (xii) any Restricted Payment made to consummate the Acquisition and the fees and expenses related thereto; provided, however, that such Restricted Payments will be excluded in the calculation of the amount of Restricted Payments; (xiii) after the Extension Date, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, (i) prior to Listing, Restricted Payments by the Company in an amount not to exceed $50 million per annum and $200 million in the aggregate, and (ii) following Listing, the payment of dividends on the listed Common Stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company; (xiv) dividends or other distributions on Disqualified Capital Stock issued by the Company to the extent such Disqualified Capital Stock constitutes Indebtedness under the indenture and was issued in compliance therewith; provided that prior to the Extension Date, no Restricted Payments may be made pursuant to this Section 5.01(b)(xiv) unless no Default or Event of Default shall have occurred or be continuing; (xv) distributions by any Restricted Subsidiary of the Company of chemicals to a holder of Capital Stock of such Restricted Subsidiary if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such Restricted Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms’-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and (xvi) after the Extension Date, payments under the Tax Sharing Agreement. (c) In addition to the foregoing, the Company may make Restricted Investments and, after the Extension Date, the Company may make Restricted Payments if at the time of such Restricted Payment or immediately after giving effect thereto: (i) no Default or an Event of Default shall have occurred and be continuing or would be caused thereby; (ii) the Company could is able to incur at least $1.00 of additional Indebtedness other than Permitted Indebtedness in accordance compliance with Section 4.09(a) hereof; and5.08; (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1the Closing Date, 2004 including the fair market value as determined reasonably and in good faith by the Board of Directors of the Company of non-cash amounts constituting Restricted Payments, shall not exceed the sum (without duplication) of the followingof: (A) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned from the end of the quarter immediately preceding the Closing Date through the last day of the last full fiscal quarter for which financial statements are reported immediately preceding the date the Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); provided, however, that for purposes of this sub-clause (iii)(A) only, to the extent any amounts that would constitute net income but which have been used to make a Permitted Investment described in clause (e) of the definition thereof, such amounts shall be excluded from Consolidated Net Income; plus (B) 100% of the aggregate Net Cash Proceeds, net cash proceeds or the Fair Market Value fair market value, as determined in good faith by the Company, of Property property other than cash, cash (including Capital Stock) of Persons engaged in a Permitted Business or property used or useful in a Permitted Business received after January 1, 2004 by the Company or its Restricted Subsidiaries from any Person (other than a subsidiary of the Company) from the issuance and sale subsequent to the Closing Date and on or sale (other than prior to any of its Restricted Subsidiaries) of shares the Reference Date of Qualified Capital Stock of the Company (including Disqualified Capital Stock of the Company that is converted into or any optionsexchanged for Qualified Capital Stock of the Company subsequent to the Closing Date) or debt securities of the Company or its Restricted Subsidiaries that are convertible into or exchangeable for Qualified Capital Stock of the Company, warrants but only when and to the extent such debt securities are converted into or rights to purchase such shares of exchanged for Qualified Capital Stock of the Company; plus (C) without duplication of any amounts included in clause (B) above, 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise net cash proceeds of any options, warrants or rights to purchase shares of Qualified Capital Stock of equity contribution received by the Company; plus (D) without duplication of any amounts included in clause (B) above, 100% of the aggregate Net Cash Proceeds received after January 1, 2004 by net cash proceeds of any sales or distributions of the Company from the issuance type described in clause (e)(i) or sale (other than to any of its Restricted Subsidiariesii) of Indebtedness or shares the definition of “Permitted Investments” but only to the extent such net cash proceeds are not utilized in accordance therewith (including Disqualified Capital Stock of the Company that have been is converted into or exchanged for Qualified Capital Stock of the Company, together with Company subsequent to the Closing Date). In determining the aggregate cash received by the Company at the time amount of such conversion or exchange; plus (E) Restricted Payments made subsequent to the extent not otherwise included Closing Date in Consolidated Net Incomeaccordance with clause (iii) of the immediately preceding paragraph, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case cash amounts expended pursuant to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3i), (4ii)(B), (5iii)(B)(1), (iv) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiaryxiii) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) above shall be Restricted Payments that shall be permitted to be made included in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Paymentcalculation. (d) In computing Consolidated Net Income under Not later than the date of making any Restricted Payment pursuant to paragraph (ac) aboveor clause (b)(xi), (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Administrative Agent an officers’ certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance complies with this Indenture notwithstanding any subsequent adjustments made Agreement and setting forth in good faith to reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s quarterly financial statements affecting Consolidated Net Income of last provided to the Company for any periodLenders pursuant to Article 6.

Appears in 2 contracts

Samples: Bridge Loan Agreement (Lyondell Chemical Co), Bridge Loan Agreement (Lyondell Chemical Co)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); ) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) warrants, rights or any options, warrants options to purchase or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement shares of any Disqualified Capital Stock class of the Company solely in shares of Qualified such Capital Stock of the Company); ; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and any that is subordinate or junior in right of its Restricted Subsidiaries), except payment to the Securities (other than Indebtedness described in any case out clause (7) of the proceeds definition of "Permitted Refinancing Indebtedness"); or or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a "Restricted Payments”Payment"), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Paymentthereto: (Ia) no a Default or an Event of Default shall have occurred and be continuing;; or (IIb) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.4; andor (IIIc) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1subsequent to November 14, 2004 2000 (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company whose determination will be conclusive) shall not exceed the sum (without duplication) of the followingof: (Ai) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned subsequent to November 14, 2000 and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); plus (Bii) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value, or as determined in good faith by the Fair Market Value Board of Property Directors of the Company, of property other than cash, cash received after January 1, 2004 by the Company from the issuance or sale any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to any of its Restricted Subsidiaries) of shares November 14, 2000 and on or prior to the Reference Date of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company(other than Excluded Contributions); plus (Ciii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise without duplication of any optionsamounts included in clause (c)(ii) above, warrants or rights to purchase shares 100% of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds of any equity contribution received after January 1, 2004 by the Company from a holder of the issuance Company's Capital Stock (other than Excluded Contributions) after November 14, 2000; plus (iv) the amount by which Indebtedness of the Company or sale any of its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange subsequent to November 14, 2000 of any Indebtedness of the Company or any of its Restricted Subsidiaries incurred after November 14, 2000 into or for Qualified Capital Stock; plus (v) without duplication, the sum of: (A) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to November 14, 2000 whether through interest payments, principal payments, dividends or other distributions or payments; (B) the net cash proceeds received by the Company or any Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plusand (EC) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary (valued in each case as provided in the definition of "Investment"); provided, however, that the sum of clauses (A), (B) and (C) above shall not to exceed in the case of any Unrestricted Subsidiary the total aggregate amount of all such Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its or any Restricted Subsidiaries Subsidiary in such the relevant Person or Unrestricted Subsidiary after January 1subsequent to November 14, 2004.2000. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (b1) Notwithstanding paragraph the payment of any dividend or other distribution within 60 days after the date of declaration of such dividend or other distribution if the dividend or other distribution would have been permitted on the date of declaration; (a2) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) if no Default or Event of Default shall have occurred and be continuing: (1) , the payment acquisition of any dividend on any shares of Capital Stock of the Company within 60 days after the date of declaration thereofCompany, if at such declaration date such declaration complied with the provisions of paragraph either (a) above (and such payment shall be deemed to have been paid on such date of declaration solely in exchange for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Qualified Capital Stock of the Company or any Restricted Subsidiary, in exchange for, Qualified Capital Stock of RPP Inc. or out (b) through the application of the aggregate Net Cash Proceeds of, net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company or, to the extent the proceeds therefrom are contributed by RPP Inc. to the Company, from the shares of Capital Stock of RPP Inc.; (43) if no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness of the Company that is subordinate or junior in right of payment to the Securities either (a) solely in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of for shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance Company or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange forRPP Inc., or out (b) through the application of the aggregate net cash proceeds of, of a substantially concurrent incurrence sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of Subordinated Indebtedness (I) shares of Qualified Capital Stock of the Company so long as or RPP Inc., or (aII) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesRefinancing Indebtedness; (64) loans made to officersif no Default or Event of Default shall have occurred and be continuing, directors or employees of repurchases by the Company or any Restricted Subsidiary approved by the Board of Directors of the Company of, or dividends, distributions or advances to RPP Inc. made on or after November 14, 2000 to allow RPP Inc. to repurchase (and/or to make payments on notes theretofore issued by RPP Inc. representing the consideration for the previous repurchase of), securities of RPP Inc., RPP Holdings or the Company from employees, directors or consultants of RPP Inc., the Company or any Subsidiaries of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such employees, directors or consultants or to the extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreements with such employees or directors of or consultants to RPP Inc., the Company or any Subsidiaries of the Company, in an aggregate amount not to exceed $1,000,000 outstanding at 7.5 million in any one timecalendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $15.0 million in any calendar year), provided that the proceeds cancellation of which are used solely (a) Indebtedness owing to purchase common stock the Company or any Restricted Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a restricted stock repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture; (5) the declaration and payment of dividends to holders of any class or employee stock purchase planseries of Preferred Stock of the Company, or provided that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Preferred Stock, after giving effect to exercise stock options received such issuance on a pro forma basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to an employee Section 4.4; (6) the payment of dividends on the Company's Common Stock (or director stock option plan dividends, distributions or other incentive planadvances to RPP Inc. to allow RPP Inc. to pay dividends on RPP Inc.'s Common Stock), following the first public offering of the Company's Common Stock (or of RPP Inc.'s Common Stock) after the Issue Date, of (i) in a principal amount not the case of the first public offering of the Company's Common Stock, up to exceed 6% per annum of the exercise price of net proceeds received by the Company in such stock optionspublic offering, or (bii) in the case of the first public offering of RPP Inc.'s Common Stock, up to refinance loans6% per annum of the amount contributed by RPP Inc. from the proceeds received by RPP Inc. from such offering, together other than, in each case, public offerings with accrued interest thereon, made pursuant respect to item the Company's Common Stock (aor RPP Inc.'s Common Stock) of this clause registered on Form S-8 (6or any successor form); and; (7) the payment of dividends, distributions or advances to RPP Inc. to allow RPP Inc. to repurchase, retire or otherwise acquire or retire for value equity interests of RPP Inc., in existence on November 14, 2000 and from the Persons holding such equity interests on November 14, 2000 and which are not held by Apollo or any of its Affiliates or members of management of the Company and its Subsidiaries on November 14, 2000 (including any equity interests issued in respect of such equity interests as a result of a stock split, recapitalization, merger, combination, consolidation or similar transaction), provided, however, that the Company shall be permitted to make Restricted Payments under this clause only if after giving effect thereto, the Company would be permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4; (8) other Restricted Payments made after November 14, 2000 in an aggregate amount not to exceed $10,000,000; 20.0 million; (9) if no Default or Event of Default shall have occurred and The actions described be continuing, payments or distributions to, or dividends, distributions or advances to RPP Inc. to allow RPP Inc. to make payments or distributions to, dissenting stockholders pursuant to applicable law, pursuant to or in clauses (1)connection with a consolidation, (3), (4) and (6) merger or transfer of assets that complies with the provisions of this paragraph Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; (b10) shall be Restricted Payments Investments that shall be permitted are made with Excluded Contributions; (11) any payments made to be made in accordance with this paragraph (b) but shall reduce consummate the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid Transactions pursuant to clause or contemplated by the Master Sale Agreement, the Non-US Sale Agreement, the Transaction Documents, the Non-US Transaction Documents (1) of this paragraph (b) shall reduce as such terms are defined in the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)Master Sale Agreement), and any other agreements related to the actions described Recapitalization in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value effect on the closing date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued Recapitalization, including payments made by the Company to RPP Inc. to allow RPP Inc. to satisfy its obligations under such agreements or such Restricted Subsidiarydocuments, in each case, as the case may besuch agreements or documents are in effect on November 14, pursuant 2000 as amended from time to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of time so long as such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would amendment is in the good faith determination judgment of the Board of Directors of the Company be permitted under not more disadvantageous to the Holders of the Securities in any material respect than such agreement or document as in effect on November 14, 2000; (12) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise; (13) payment of dividends, other distributions or other amounts by the Company to RPP Inc. in amounts required for RPP Inc. to pay franchise taxes and other fees required to maintain its existence and provide for all other operating costs of RPP Inc., including, without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other costs and expenses, including all costs and expenses with respect to filings with the Commission, of up to $2.5 million per fiscal year; (14) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or Capital Stock of RPP Inc. or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company or, to the extent the proceeds therefrom are contributed by RPP Inc. to the Company, from shares of Capital Stock of RPP Inc.; (15) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.17 and 4.18; (16) the payment of dividends, other distributions or amounts by the Company to RPP Inc. in amounts required to pay the tax obligations of the Company and its Subsidiaries and the tax obligations of RPP Inc. or any of its direct or indirect parent attributable to the Company and its Subsidiaries; provided that (x) the amount of dividends paid pursuant to this Indenture, clause (16) to enable RPP Inc. or any of its direct or indirect parents to pay Federal and state income taxes at any time shall not exceed the amount of such Restricted Payment Federal and state income taxes actually owing by RPP Inc. or any of its direct or indirect parents at such time for the respective period and (y) any refunds received by RPP Inc. or any of its direct or indirect parents attributable to the Company and its Subsidiaries shall promptly be deemed to have been made in compliance with this Indenture notwithstanding returned by RPP Inc. or any subsequent adjustments made in good faith of its direct or indirect parents to the Company’s financial statements affecting Consolidated Net Income ; and (17) if no Default or Event of Default shall have occurred and be continuing, payments of cash, or dividends, distributions or advances made after November 14, 2000 to RPP Inc. to allow RPP Inc. to make payments of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock of RPP Inc., the Company for or any period.Restricted Subsidiary, which in the aggregate do not exceed $3.0

Appears in 2 contracts

Samples: Indenture (RPP Capital Corp), Indenture (RPP Capital Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiary Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company or in options, warrants payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled principal repayment or scheduled maturity, except a payment, scheduled purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund payment obligation, principal installment or maturitythe Stated Maturity thereof, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)in each case, except in any case out due within one year of the proceeds date of Permitted Refinancing Indebtednesssuch payment, purchase, redemption, defeasance or other acquisition; or (4) make any Restricted Investment; Investment (all such payments or and other actions described set forth in these clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (I1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6) and (7) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus (c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus (d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; (4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period; (6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise; (7) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or (8) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (8), no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared continuing or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall would be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) caused thereby. The amount of all Restricted Payments (other than cash) will be the Fair Market Value fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. . The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $25.0 million, by an officer of the Company and, in the case of amounts over $50.0 million, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (dexcluding any Restricted Payment described in the preceding clause (2), (3), (4), (6) In computing Consolidated Net Income under paragraph or (a7)) abovethe Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (8), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall will be permitted to rely divide or classify (or later divided or classify or reclassify in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of whole or in part in its sole discretion) such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance any manner that complies with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 2 contracts

Samples: Second Supplemental Indenture (Whiting Petroleum Corp), First Supplemental Indenture (Whiting Petroleum Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), Payment unless at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereofcontinuing or occur as a consequence thereof; and (IIIb) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Issue Date through and including the date of such Restricted Payment does not exceed the sum (without duplication) of the following: (A) 50% of the Company's Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on from and including January 1, 2004 2000 to and ending on including the last day of the Company’s last fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment Payment. The provisions of this Section 4.11 shall not prohibit (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 sixty (60) days after the date of declaration thereof, if at such declaration date such declaration complied payment would comply with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such this Indenture at the date of the declaration for purposes of any calculation required by the provisions of paragraph such payment, (a) above); (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryIndebtedness of the Company which is subordinated in right of payment to the Securities by conversion into, or by an exchange for, shares of Capital Stock of the Company that are not Disqualified Stock or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock (other than Disqualified Stock) of the Company, and (iii) the redemption or retirement of Indebtedness of the Company which is subordinated in right of payment to the Securities in exchange for, by conversion into, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale of subordinated Indebtedness of the Company (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value that is contractually subordinated in right of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant payment to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes Securities at least to the same extent as such Subordinated that the Indebtedness so purchased, redeemed, repaid, defeased, acquired being redeemed or retired, and (c) such new Indebtedness has an Average Life retired is subordinated to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days Securities. Not later than the Stated Maturity for the final scheduled principal payment date of the Notes; (6) loans made to officers, directors or employees of the Company or making any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one timePayment, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers' Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in is permitted and setting forth the good faith determination of basis upon which the Company calculations required by this Section 4.11 were computed, which calculations may be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to based upon the Company’s 's latest available financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 2 contracts

Samples: Indenture (Ibf Vi Guaranteed Income Fund), Indenture (Ibf Vi Guaranteed Income Fund)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any distribution (other distribution than dividends or distributions payable in Qualified Capital Stock of the Company and dividends and distributions payable to holders of, any the Company or another Restricted Subsidiary of the Company) on or in respect of shares of Capital Stock of the Company or any its Restricted Subsidiary (other than dividends or distributions payable solely in shares Subsidiaries to holders of Qualified such Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (Restricted Subsidiary, other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of held by the Company solely in shares of Qualified Capital Stock of the Company)or any Restricted Subsidiary; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and or any Guarantor that is subordinate or junior in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessNotes or a Guarantee; or (4) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Paymentthereto: (Ii) no a Default or an Event of Default shall have occurred and be continuing; (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof; and4.11 or (IIIiii) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1subsequent to the Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall not exceed the sum (without duplication) of the followingof: (A) 50% of the aggregate amount of the Consolidated Net Income Adjusted Cash Flow of the Company accrued on a cumulative basis during the period (taken as one accounting period) beginning on January 1, 2004 the first day of the Company’s fiscal quarter during which the Issue Date occurs and ending on the last day of the Company’s last full fiscal quarter ending prior to preceding the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)Transaction Date; plus (B) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from the issuance or sale any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to any of its Restricted Subsidiaries) of shares the Issue Date of Qualified Capital Stock of the Company or (excluding any options, warrants or rights net proceeds from an Equity Offering to purchase such shares of Qualified Capital Stock the extent used to redeem Notes pursuant to the provisions described in Section 5(b) of the CompanyNotes); plus (C) without duplication of any amounts included in clause (iii)(B) above, 100% of the aggregate Net Cash Proceeds, or the Fair Market Value net cash proceeds of Property other than cash, any equity contribution received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock a holder of the Company’s Capital Stock subsequent to the Issue Date (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes pursuant to the provisions described in Section 5(b) of the Notes); plus (D) 100% of the aggregate Net Cash Proceeds net cash proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock of the Company that have been converted into or exchanged for Qualified Capital Stock of the Company, together with Company subsequent to the aggregate cash received by the Company at the time of such conversion or exchangeIssue Date; plus (E) an amount equal to the extent not otherwise included in Consolidated Net Income, sum of (i) the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and its proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiaries Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary after January 1at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, 2004. (b) Notwithstanding paragraph (a) abovehowever, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company and its or any Restricted Subsidiaries may take the following actions so long as (Subsidiary in such Person or Unrestricted Subsidiary. In the case of clauses (3), (4), (5iii)(B) and (7C) below) no Default above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or Event indirectly using funds borrowed from the Company or any Subsidiary of Default the Company, shall have occurred be excluded until and be continuingto the extent such borrowing is repaid. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1) the payment of any dividend or other distribution or redemption within 60 days after the date of declaration of such dividend or call for redemption if such payment would have been permitted on the date of declaration or call for redemption; (2) the acquisition of any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Companysale; (3) the repurchase, redemption or other acquisition or retirement of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes and Guarantees either (i) solely in exchange for shares of any class Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of (a) a sale for cash (other than to a Subsidiary of the Company) within 60 days after such sale of shares of Qualified Capital Stock of the Company or any Restricted Subsidiary(b) if no Default or Event of Default would exist after giving effect thereto, Refinancing Indebtedness; (4) an Investment either (i) solely in exchange for, or out for shares of Qualified Capital Stock of the aggregate Net Cash Proceeds of, Company or (ii) through the application of the net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the CompanyCompany within 60 days after such sale; (5) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, the purchase, redemption, repayment, defeasance repurchase or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified shares of Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness Stock of the Company so long as from employees, former employees, directors or former directors of the Company (a) the principal amount or permitted transferees of such new Indebtedness does not exceed the principal amount (oremployees, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereofformer employees, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchaseddirectors or former directors), redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced agreements (including employment agreements) or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, plans (bor amendments thereto) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an under which such shares were granted, issued or sold; provided, however, that the aggregate amount of such repurchases and other acquisitions in any calendar year shall not to exceed $1,000,000 outstanding at 250,000 plus any one timesuch amounts not used in prior fiscal years; (6) in the event of a Change of Control, and if no Default shall have occurred and be continuing or would exist after giving effect, the proceeds payment, purchase, redemption, defeasance or other acquisition or retirement of which are used solely (a) Indebtedness that is subordinated to the Notes or the Guarantees, in each case, at a purchase common stock price not greater than 101% of the principal amount of such Indebtedness (or, if such Indebtedness was issued with original issue discount, 101% of the accreted value), plus any accrued and unpaid interest thereon; provided, however, that prior to or substantially concurrently with such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company has made a Change of Control Offer with respect to the Notes as a result of such Change of Control and has repurchased all Notes validly tendered and not withdrawn in connection with a restricted such Change of Control Offer; (7) repurchases of Capital Stock deemed to occur upon exercise of stock or employee stock purchase planoptions, or to exercise stock options received pursuant to an employee or director stock option plan warrants or other incentive plan, in similar rights if such Capital Stock represents a principal amount not to exceed portion of the exercise price of such stock options, warrants or other similar rights; (b) 8) payments or distributions to refinance loans, together with accrued interest thereon, made dissenting stockholders of Capital Stock of the Company pursuant to item (a) applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this clause (6)Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company or any of its Restricted Subsidiaries; and (79) if no Default shall have occurred and be continuing or would exist after giving effect thereto, other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described 10,000,000 in the aggregate after the Issue Date. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the first paragraph of this Section 4.09, amounts expended pursuant to clauses (1), (32)(ii), (43)(ii)(a) and (64)(ii) of this the immediately preceding paragraph (b) shall be Restricted Payments that included in such calculation and amounts expended pursuant to any other clause of the immediately preceding paragraph shall be permitted to be made in accordance with this paragraph (b) but shall reduce excluded therefrom. Promptly following the amount that would otherwise be available for Restricted Payments under clause (3) end of paragraph (a) (provided that each fiscal quarter during which any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiarywas made, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers’ Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of each such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance complies with this Indenture notwithstanding any subsequent adjustments made and setting forth in good faith to reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s latest available internal quarterly financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 2 contracts

Samples: Indenture (McLeodUSA Holdings Inc), Indenture (McLeodusa Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of its Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified its Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the CompanyDisqualified Capital Stock) or any in options, warrants or other rights to acquire such Capital Stock (and other than dividends and distributions paid by a Restricted Subsidiary to the Company or to another Restricted Subsidiary), (ii) purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease redeem or otherwise acquire or retire for value, directly or indirectly, any shares of the Capital Stock of the Company or any Restricted Subsidiary or options, warrants or other rights to acquire such Capital Stock, (iii) make any principal payment on, or repurchase, redeem, defease, retire or otherwise acquire for value, prior to any the relevant scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment in any Person, including, without limitation, any Unrestricted Subsidiary (other than a Permitted Investment; ) (such payments or other the foregoing actions described in clauses (i) through (iv) above being hereinafter collectively referred to as "Restricted Payments”), ") unless at the time of and after giving effect to the proposed Restricted Payment: , (IA) no Default or Event of Default shall have occurred and be continuing; continuing and such Restricted Payment shall not cause or constitute a Default or an Event of Default; (IIB) immediately before and immediately after giving effect to such transaction on a pro forma basis, the Company could incur at least $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a) hereof3.8(a); and and (IIIC) the aggregate amount of all such Restricted Payments (the amount of any such Restricted Payment, if other than cash, to be determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a resolution of the Board of Directors) declared or made after January 1, 2004 shall the Issue Date (including such Restricted Payment) does not exceed the sum (without duplication) of the followingof: (A1) 50% of the aggregate cumulative Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of such loss); plus) of the Company accrued on a cumulative basis during the period (taken as one accounting period) from the fiscal quarter that first begins after the Issue Date to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment; (B2) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of its shares of Qualified Capital Stock of the Company (other than Disqualified Capital Stock) or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net other cash proceeds of, a substantially concurrent incurrence contributions to its capital (other than excluding amounts used pursuant to a Restricted Subsidiaryclauses (ii) or (iii) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1Section 3.9(b)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.;

Appears in 2 contracts

Samples: Senior Subordinated Loan Agreement (Schein Pharmaceutical Inc), Senior Subordinated Loan Agreement (Danbury Pharmacal Puerto Rico Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary its Subsidiaries to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders in respect of, any shares of the Company’s or any Subsidiary’s Capital Stock of the Company or any Restricted Subsidiary (other than excluding dividends or distributions payable solely in shares of Qualified the Company’s Capital Stock of the Company or in options, warrants or other rights to purchase Qualified such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any Person other than the Company);Company or any of its Wholly Owned Subsidiaries; or (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted InvestmentStock; (such payments or any other actions described in clauses (i) through and (ivii) above being are collectively referred to as “Restricted Payments”), ) unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution): (IA) no Default or Event of Default shall have occurred and be continuing; ; (IIB) the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under the provisions of Section 4.09(a) hereof4.05; and and (IIIC) the aggregate amount of all Restricted Payments (other than Restricted Payments permitted by clause (b)(iv) of this Section) declared or made after January 1, 2004 shall the Issue Date (including the proposed Restricted Payment) does not exceed the sum (without duplication) of the followingof: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Amc Entertainment Inc), Indenture (Marquee Holdings Inc.)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiary Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and other than dividends or in options, warrants distributions payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) its direct or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)indirect parents; (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness of the Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing IndebtednessStated Maturity thereof; or (4) make any Restricted Investment; , (all such payments or and other actions described set forth in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof; (IIB) the Company could incur $would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with Section 4.09(a) hereof; and (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after by the Company and its Restricted Subsidiaries since the Measurement Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b)) pursuant to this Indenture, is less than the sum, without duplication, of: (i) 75% of the EBITDA of the Company less 2.00 times Fixed Charges for the period (taken as one accounting period) from January 1, 2004 shall not exceed 2019 to the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day end of the Company’s last most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be EBITDA for such period is a lossdeficit, minus 100% of such lossdeficit); plus (Bii) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company since the Measurement Date as a contribution to its common equity capital or from the issuance issue or sale of Equity Interests (other than to any of its Restricted SubsidiariesDisqualified Stock) of shares of Qualified Capital Stock of the Company (in each case, other than in connection with any Excluded Contribution) or any options, warrants from the issue or rights to purchase such shares sale of Qualified Capital convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plus (Eiii) to the extent not otherwise included in Consolidated Net Income, that any Restricted Investment that was made after the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Measurement Date (x) is reduced as a result of loans or advances, or other transfers payments of assets, in each case dividends to the Company or a Restricted Subsidiary after January 1of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, 2004 from (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus (iv) to the extent that any Unrestricted Subsidiary or from of the redesignation of an Unrestricted Subsidiary Company designated as such after the Measurement Date is re-designated as a Restricted Subsidiary after the Measurement Date, the lesser of (valued i) the Fair Market Value of the Company’s Restricted Investment in each case such Subsidiary as provided of the date of such re-designation or (ii) the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the definition date such entity was originally designated as an Unrestricted Subsidiary through the date of “Investment”), not to exceed in such re-designation; plus (v) 100% of the case aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the total amount Company after the Measurement Date or 100% of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made any dividends received by the Company and its or a Restricted Subsidiaries in such Subsidiary of the Company after the Measurement Date from an Unrestricted Subsidiary after January 1, 2004of the Company. (b) Notwithstanding paragraph (aThe provisions of Section 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuinghereof will not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company irrevocable redemption within 60 days after the date of declaration thereofof the dividend or giving of the redemption notice, as the case may be, if at such the date of declaration date such declaration or notice, the dividend or redemption payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2) the payment making of any dividend payable from Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company (in each case, other than in connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from Section 4.07(a)(4)(C)(ii) hereof; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate Company or any Subsidiary Guarantor with the net cash proceeds of, from a substantially concurrent incurrence Incurrence of Permitted Refinancing Indebtedness; (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a4) the principal amount payment of such new Indebtedness does not exceed the principal amount any dividend (or, if such Subordinated Indebtedness being refinanced provides for an amount less than in the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount case of any premium required to be paid in connection with such refinancing pursuant partnership or limited liability company, any similar distribution) by a Restricted Subsidiary to the terms holders of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has its Equity Interests on a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notespro rata basis; (65) loans made to officersthe repurchase, directors redemption or employees other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed US$1.0 million in any twelve-month period; (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; (7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof; (8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA; (9) [RESERVED]; (10) Restricted Payments that are made with Excluded Contributions; (11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed $1,000,000 outstanding at US$2.0 million per annum; (12) the making of Restricted Payments, if applicable: (A) in amounts required for any one timedirect or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum; (B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which are used solely have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii); (aC) to purchase common stock in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and (D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment; (13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11; (14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino); (15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07; (16) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the Notes in connection with a restricted stock Change of Control Offer have been repurchased, redeemed or employee stock purchase plan, acquired for value; (17) payments or distributions to exercise stock options received dissenting stockholders of Capital Stock of the Company pursuant to an employee applicable law in connection with a consolidation, merger or director stock option plan transfer of all or other incentive plansubstantially all of the assets of the Company and its Restricted Subsidiaries, in taken as a principal amount not to exceed the exercise price whole, that complies with Section 5.01; provided that as a result of such stock optionsconsolidation, merger or transfer of assets, the Company shall have made a Change of Control Offer (bif required by this Indenture) to refinance loansand that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, together with accrued interest thereon, made pursuant to item (a) of this clause (6)redeemed or acquired for value; and (718) other Restricted Payments in an aggregate amount not to exceed $10,000,000; US$15.0 million since the Issue Date, provided, however, that at the time of, and The actions described in after giving effect to, any Restricted Payment permitted under clauses (112), (3), (413) and (618) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)Section 4.07(b), no Default shall have occurred and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that continuing or would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) occur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) . The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Company shall use audited financial statements for the portions Board of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records Directors of the Company for whose resolution with respect thereto will be delivered to the remaining portion of such period and (2) the Company shall be permitted to rely Trustee as set forth in good faith on the financial statements and other financial data derived from the books and records an Officer’s Certificate of the Company that are available on the date of determinationCompany. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the The Company’s financial statements affecting Consolidated Net Income Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the Company for any periodFair Market Value exceeds US$45.0 million.

Appears in 2 contracts

Samples: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Resorts & Entertainment LTD)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary toSubsidiaries, directly or indirectly, to take any of the following actions: (1i) declare or pay any dividend on, or make any distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests, including any dividend or distribution payable in connection with any merger or consolidation (other distribution to holders of, any shares of Capital Stock than (A) dividends or distributions by the Company payable in Equity Interests (other than Disqualified Stock) of the Company or any Restricted Subsidiary (other than B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable solely on or in shares respect of Qualified Capital Stock any class or series of securities issued by a Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in options, warrants accordance with its Equity Interests in such class or other rights to purchase Qualified Capital Stock series of the Companysecurities); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for valuevalue any Equity Interests of the Company; (iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled principal paymentrepayment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; Investment (all such payments or and other actions described set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (I1) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof; (II2) immediately before and immediately after giving effect to such transaction on a pro forma basis, the Company could incur $1.00 of additional Indebtedness in accordance with under paragraph (a) of Section 4.09(a) hereof1010; and (III3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by the Company and its Restricted Subsidiaries after January 1the Issuance Date (including Restricted Payments permitted by clauses (i), 2004 shall not exceed (ii) (with respect to the sum payment of dividends on Refunding Capital Stock pursuant to clause (without duplicationb) thereof), (iv) (only to the extent that amounts paid pursuant to such clause are greater than amounts that would have been paid pursuant to such clause if $5 million and $10 million were substituted in such clause for $10 million and $20 million, respectively), (v), (viii) and (ix) of the followingnext succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum of: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during for the period beginning on January 1, 2004 and ending on (taken as one accounting period) from the last day fiscal quarter that first begins after the Issuance Date to the end of the Company’s last 's most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if in the case such Consolidated Net Income shall be for such period is a lossdeficit, minus 100% of such lossdeficit); plus provided, however, that for the purposes of this clause (B) the aggregate A), Consolidated Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than Income shall be deemed to include any of its Restricted Subsidiaries) of shares of Qualified increases during such period to Consolidated Additional Paid-In Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) which increases are attributable to tax benefits from net operating losses incurred prior to the extent Issuance Date and are not otherwise included in Consolidated Net IncomeIncome of the Company for such period, plus (B) 100% of the aggregate net reduction cash proceeds and the fair market value, as determined in Investments good faith by the Board of Directors, of marketable securities received by the Company since immediately after the closing of the Merger and the Financings from the issue or sale of Equity Interests (including Retired Capital Stock (as defined below), but excluding cash proceeds and marketable securities received from the sale of Equity Interests to members of management, directors or consultants of the Company and its Subsidiaries after the Issuance Date to the extent such amounts have been applied to Restricted Payments in Unrestricted Subsidiaries resulting accordance with clause (iv) of the next succeeding paragraph) or debt securities of the Company that have been converted into such Equity Interests of the Company (other than Refunding Capital Stock (as defined below) or Equity Interests or convertible debt securities of the Company sold to a Restricted Subsidiary and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus (C) 100% of the aggregate amount of cash and marketable securities contributed to the capital of the Company following the Issuance Date, plus (D) 100% of the aggregate amount received in cash and the fair market value of marketable securities (other than Restricted Investments) received from dividends, repayments of loans or advances, (A) the sale or other transfers of assets, in each case disposition (other than to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation Subsidiary) of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such or (B) a dividend from, or the sale (other than to the Company or a Restricted Subsidiary) of the stock of, an Unrestricted Subsidiary after January 1, 2004(other than an Unrestricted Subsidiary the Investment in which was made by the Company or a Restricted Subsidiary pursuant to clauses (vi) or (x) below). (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingThe foregoing provisions will not prohibit: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at the date of declaration such declaration date such declaration payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)Indenture; (2A) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the redemption, repurchase, redemption retirement or other acquisition or retirement of any shares of any class of Equity Interests (the "Retired Capital Stock Stock") or Subordinated Indebtedness of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of, Equity Interests of shares the Company (other than any Disqualified Stock) (the "Refunding Capital Stock"), and (B) if immediately prior to the retirement of Qualified Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (v) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement; provided, however, that at the time of the Companydeclaration of any such dividends, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (4iii) the repurchase, redemption, repayment, defeasance repurchase or other acquisition or retirement for value of any Subordinated Indebtedness in of the Company made by exchange for, or out of the aggregate Net Cash Proceeds from, a proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated new Indebtedness of the Company so long as (aA) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeasedrepurchased, acquired or retired, retired for value (plus the amount of any premium required to be paid in connection with such refinancing pursuant to under the terms of the instrument governing the Subordinated Indebtedness refinanced being so redeemed, repurchased, acquired or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancingretired), (bB) such new Indebtedness is subordinated to the Senior Indebtedness and the Notes at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repaidrepurchased, defeasedacquired or retired for value, (C) such Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (D) such Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6iv) loans made a Restricted Payment to officerspay for the repurchase, directors retirement or employees other acquisition or retirement for value of common Equity Interests of the Company held by any future, present or former employee, director or consultant of the Company or any Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided, however, that the aggregate Restricted Subsidiary approved Payments made under this clause (iv) does not exceed in any calendar year $10 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $20 million in any calendar year); provided further that such amount in any calendar year may be increased by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, (A) the cash proceeds from the sale of which are used solely (a) to purchase common stock Equity Interests of the Company to members of management, directors or consultants of the Company and its Subsidiaries that occurs after the Issuance Date (to the extent the cash proceeds from the sale of such Equity Interest have not otherwise been applied to the payment of Restricted Payments by virtue of the preceding subclause (a)(3)) plus (B) the cash proceeds of key man life insurance policies received by the Company and its Restricted Subsidiaries after the Issuance Date less (C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this subparagraph (iv); and provided further that cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries in connection with a restricted stock repurchase of Equity Interests of the Company will not be deemed to 101 constitute a Restricted Payment for purposes of this Section 1009 or employee stock purchase planany other provision hereof; (v) the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issuance Date (including, or to exercise stock options received without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii)); provided, however, that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance on a pro forma basis, the Company and its Restricted Subsidiaries would have had a Fixed Charge Coverage Ratio of at least 1.75 to 1.00; (vi) Investments in Unrestricted Subsidiaries having an employee or director stock option plan or aggregate fair market value, taken together with all other incentive planInvestments made pursuant to this clause (vi) that are at that time outstanding, in a principal amount not to exceed $20 million at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (vii) repurchases of Equity Interests deemed to occur upon exercise of stock options if such Equity Interests represent a portion of the exercise price of such options; (viii) the payment of dividends on the Company's Common Stock, following the first public offering of the Company's Common Stock after the Issuance Date, of up to 6% per annum of the net proceeds received by the Company in such public offering, other than public offerings with respect to the Company's Common Stock registered on Form S-8; (ix) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Equity Interests of the Company in existence on the Issuance Date and which are not held by KKR or any of their Affiliates or the Management Group on the Issuance Date (including any Equity Interests issued in respect of such Equity Interests as a result of a stock optionssplit, recapitalization, merger, combination, consolidation or otherwise, but excluding any management equity plan or stock option plan or similar agreement), provided that the aggregate Restricted Payments made under this clause (bix) shall not exceed $30 million, provided further that notwithstanding the foregoing proviso, the Company shall be permitted to refinance loansmake Restricted Payments under this clause (ix) only if after giving effect thereto, together with accrued interest thereon, made pursuant the Company would be permitted to item incur at least $1.00 of additional Indebtedness under paragraph (a) of this clause (6)Section 1010; and (7x) other Restricted Payments in an aggregate amount not to exceed $10,000,00020 million; provided, however, that at the time of, and The actions described in after giving effect to, any Restricted Payment permitted under clauses (1iii), (3iv), (4v), (vi), (vii), (viii), (ix) and (6) x), no Default or Event of this paragraph (b) Default shall have occurred and be continuing or would occur as a consequence thereof; and provided further that for purposes of determining the aggregate amount expended for Restricted Payments that shall be permitted to be made in accordance with this paragraph subclause (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3a)(3) of paragraph the immediately preceding paragraph, only the amounts expended under clauses (ai), (ii) (provided that any dividend paid with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (1) of this paragraph (b) shall reduce thereof), (iv) (only to the amount extent that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently amounts paid pursuant to such clause (1))are greater than amounts that would have been paid pursuant to such clause if $5 million and $10 million were substituted in such clause for $10 million and $20 million, and the actions described in clauses (2respectively), (5v), (viii) and (7) of this paragraph (bix) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)included. (c) The amount of all Restricted Payments (other Not later than cash) will be the Fair Market Value on the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 1009 were computed, which calculations may be based upon the Company's latest available financial statements. The Trustee shall have no duty to recompute or recalculate or verify the accuracy of the asset(s) or securities proposed to be transferred or issued by the Company or information set forth in such Restricted Subsidiary, as the case may be, pursuant to the Restricted PaymentOfficers' Certificate. (d) In computing Consolidated Net Income under paragraph (a) aboveAs of the Issuance Date, (1) all of the Company's Subsidiaries will be Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the second to last sentence of the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company shall use audited financial statements for and its Restricted Subsidiaries (except to the portions extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the relevant period for which audited financial statements are available on the date definition of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall "Investments." Such designation will only be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes if a Restricted Payment which, in such amount would be permitted at such time and if such Subsidiary otherwise meets the time definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the making of such Restricted Payment would restrictive covenants set forth in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (KCLC Acquisition Corp), Indenture (Kindercare Learning Centers Inc /De)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiary Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and other than dividends or in options, warrants distributions payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) its direct or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)indirect parents; (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness of the Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing IndebtednessStated Maturity thereof; or (4) make any Restricted Investment; , (all such payments or and other actions described set forth in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof; (IIB) the Company could incur $would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with Section 4.09(a) hereof; and (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1by the Company and its Restricted Subsidiaries since the Issue Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b)) pursuant to this Indenture, 2004 shall not exceed is less than the sum (without duplication) of the followingof: (Ai) 5075% of the Consolidated Net Income EBITDA of the Company accrued on a cumulative basis during less 2.00 times Fixed Charges for the period (taken as one accounting period) from the beginning on January 1, 2004 and ending on of the last day fiscal quarter in which the Notes are issued to the end of the Company’s last most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be EBITDA for such period is a lossdeficit, minus 100% of such lossdeficit); plus (Bii) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company since the Issue Date as a contribution to its common equity capital or from the issuance issue or sale of Equity Interests (other than to any of its Restricted SubsidiariesDisqualified Stock) of shares of Qualified Capital Stock of the Company (in each case, other than in connection with any Excluded Contribution) or any options, warrants from the issue or rights to purchase such shares sale of Qualified Capital convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plus (Eiii) to the extent not otherwise included in Consolidated Net Income, that any Restricted Investment that was made after the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Issue Date (x) is reduced as a result of loans or advances, or other transfers payments of assets, in each case dividends to the Company or a Restricted Subsidiary after January 1of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, 2004 from (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus (iv) to the extent that any Unrestricted Subsidiary or from of the redesignation of an Unrestricted Subsidiary Company designated as such after the Issue Date is re-designated as a Restricted Subsidiary after the Issue Date, the lesser of (valued i) the Fair Market Value of the Company’s Restricted Investment in each case such Subsidiary as provided of the date of such re-designation or (ii) the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the definition date such entity was originally designated as an Unrestricted Subsidiary through the date of “Investment”), not to exceed in such re-designation; plus (v) 100% of the case aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the total amount Company after the Issue Date or 100% of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made any dividends received by the Company and its or a Restricted Subsidiaries in such Subsidiary of the Company after the Issue Date from an Unrestricted Subsidiary after January 1, 2004of the Company. (b) Notwithstanding paragraph (aThe provisions of Section 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuinghereof will not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company irrevocable redemption within 60 days after the date of declaration thereofof the dividend or giving of the redemption notice, as the case may be, if at such the date of declaration date such declaration or notice, the dividend or redemption payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2) the payment making of any dividend payable from Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company (in each case, other than in connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from Section 4.07(a)(4)(C)(ii) hereof; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate Company or any Subsidiary Guarantor with the net cash proceeds of, from a substantially concurrent incurrence Incurrence of Permitted Refinancing Indebtedness; (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a4) the principal amount payment of such new Indebtedness does not exceed the principal amount any dividend (or, if such Subordinated Indebtedness being refinanced provides for an amount less than in the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount case of any premium required to be paid in connection with such refinancing pursuant partnership or limited liability company, any similar distribution) by a Restricted Subsidiary to the terms holders of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has its Equity Interests on a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notespro rata basis; (65) loans made to officersthe repurchase, directors redemption or employees other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed US$1.0 million in any twelve-month period; (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; (7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof; (8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA; (9) [RESERVED]; (10) Restricted Payments that are made with Excluded Contributions; (11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed $1,000,000 outstanding at US$2.0 million per annum; (12) the making of Restricted Payments, if applicable: (A) in amounts required for any one timedirect or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum; (B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which are used solely have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii); (aC) to purchase common stock in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and (D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment; (13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11; (14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino); (15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07; (16) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the Notes in connection with a restricted stock Change of Control Offer have been repurchased, redeemed or employee stock purchase plan, acquired for value; (17) payments or distributions to exercise stock options received dissenting stockholders of Capital Stock of the Company pursuant to an employee applicable law in connection with a consolidation, merger or director stock option plan transfer of all or other incentive plansubstantially all of the assets of the Company and its Restricted Subsidiaries, in taken as a principal amount not to exceed the exercise price whole, that complies with Section 5.01; provided that as a result of such stock optionsconsolidation, merger or transfer of assets, the Company shall have made a Change of Control Offer (bif required by this Indenture) to refinance loansand that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, together with accrued interest thereon, made pursuant to item (a) of this clause (6)redeemed or acquired for value; and (718) other Restricted Payments in an aggregate amount not to exceed $10,000,000; US$15.0 million since the Issue Date, provided, however, that at the time of, and The actions described in after giving effect to, any Restricted Payment permitted under clauses (112), (3), (413) and (618) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)Section 4.07(b), no Default shall have occurred and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that continuing or would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) occur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) . The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Company shall use audited financial statements for the portions Board of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records Directors of the Company for whose resolution with respect thereto will be delivered to the remaining portion of such period and (2) the Company shall be permitted to rely Trustee as set forth in good faith on the financial statements and other financial data derived from the books and records an Officer’s Certificate of the Company that are available on the date of determinationCompany. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the The Company’s financial statements affecting Consolidated Net Income Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the Company for any periodFair Market Value exceeds US$45.0 million.

Appears in 2 contracts

Samples: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Resorts & Entertainment LTD)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary toSubsidiary, directly or indirectly, take the following actionsto make a Restricted Payment. (b) The preceding provision will not prohibit: (1) declare or pay any dividend onRestricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or make any other distribution to holders ofmade by exchange for, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or in options, warrants an employee stock ownership plan or other rights to purchase Qualified Capital Stock a trust established by the Company or any of its Subsidiaries for the Company)benefit of their employees) or a substantially concurrent cash capital contribution received by the Company from its shareholders; (2) any purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in Obligations of the Company or any Subsidiary Guarantor made by exchange for, or out of the aggregate net cash proceeds of the substantially concurrent sale of, a substantially concurrent incurrence Indebtedness which is permitted to be Incurred pursuant to Section 4.03; (3) so long as no Default has occurred and is continuing, the purchase, redemption or other than to a Restricted Subsidiary) acquisition or retirement for value of Subordinated Indebtedness Capital Stock of the Company so long as held by officers, directors, employees or consultants or former officers, directors, employees or consultants (aor their estates or beneficiaries) (excluding, in each case, the principal amount Manager, other than with respect to the Manager’s net exercise of options under the Management Incentive Plan, which shall be permitted), upon death, disability, retirement, severance or termination of employment or other service relationship, or in order to satisfy tax withholding obligations of such new Indebtedness persons upon the exercise of options or the vesting of performance shares, or pursuant to any agreement under which such Capital Stock was issued (including, without limitation, repurchases of Capital Stock under the Management Incentive Plan); provided, however, that the aggregate consideration paid therefor does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the aggregate amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined $1,000,000; (4) payments made by the Company as necessary a result of dissenters’ rights related to accomplish a merger involving the Company; provided, however, that as a result of such refinancing, plus the amount of expenses of merger the Company incurred has made a Change of Control offer under Section 4.10 to the extent required by, and in accordance with, the provisions of such covenant and any Notes tendered in connection with such refinancingtherewith have been purchased; (5) the payment of fees, (b) such new Indebtedness is subordinated expenses and indemnities to the Notes at least Manager pursuant to the same extent Management Agreement, so long as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity no Event of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes;Default would result therefrom; and (6) loans made to officers, directors or employees of Dividends and distributions by the Company or any Restricted Subsidiary approved by on its Capital Stock subsequent to the Board of Directors of the Company Issue Date in an aggregate amount not to exceed $1,000,000 outstanding at any one time, 30,000,000. Notwithstanding the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1)foregoing, (3), (4i) and (6) of this paragraph (b) no Restricted Payment shall be Restricted Payments that made if an Event of Default shall be permitted to be made in accordance with this paragraph have occurred and is continuing (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid other than pursuant to clause (15) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5above) and (7ii) the payment of this paragraph (b) shall interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be permitted deemed to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the a Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Wolverine Tube Inc), Indenture (Wt Holding Company, Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiary Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and other than dividends or in options, warrants distributions payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness of the Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing IndebtednessStated Maturity thereof; or (4) make any Restricted Investment; , (all such payments or and other actions described set forth in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof; (IIB) the Company could incur $would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with Section 4.09(a) hereof; (C) the Opening Date has occurred; and (IIID) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1by the Company and its Restricted Subsidiaries since the Issue Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b), 2004 shall not exceed is less than the sum (sum, without duplication) of the following, of: (Ai) 5075% of the Consolidated Net Income EBITDA of the Company accrued on a cumulative basis during less 2.25 times Fixed Charges for the period (taken as one accounting period) from the beginning on January 1, 2004 and ending on of the last day fiscal quarter during which the Opening Date occurs to the end of the Company’s last most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be EBITDA for such period is a lossdeficit, minus 100% of such lossdeficit); plus (Bii) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company since the Issue Date as a contribution to its common equity capital or from the issuance issue or sale of Equity Interests (other than to any of its Restricted SubsidiariesDisqualified Stock) of shares of Qualified Capital Stock of the Company (in each case, other than in connection with any Excluded Contribution or any options, warrants Sponsor Project Contribution) or rights to purchase such shares from the issue or sale of Qualified Capital convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plus (Eiii) to the extent not otherwise included in Consolidated Net Income, that any Restricted Investment that was made after the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Issue Date (x) is reduced as a result of loans or advances, or other transfers payments of assets, in each case dividends to the Company or a Restricted Subsidiary after January 1or (y) is sold for cash or otherwise liquidated or repaid for cash, 2004 from (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Guarantee granted by the Company or a Restricted Subsidiary that constituted a Restricted Investment, to the extent that the initial granting of such Guarantee reduced the restricted payments capacity under Section 4.07(a)(D); plus (iv) to the extent that any Unrestricted Subsidiary or from of the redesignation of an Unrestricted Subsidiary Company designated as such after the Issue Date is re-designated as a Restricted Subsidiary after the Issue Date, the lesser of (valued i) the Fair Market Value of the Company’s Restricted Investment in each case such Subsidiary as provided of the date of such re-designation or (ii) the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary in such Unrestricted Subsidiary from the definition date such entity was originally designated as an Unrestricted Subsidiary through the date of “Investment”), not to exceed in such re-designation; plus (v) 100% of the case aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the total amount Company after the Issue Date or 100% of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made any dividends received by the Company and its or a Restricted Subsidiaries in such Subsidiary after the Issue Date from an Unrestricted Subsidiary after January 1, 2004of the Company. (b) Notwithstanding paragraph (aThe provisions of Section 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuinghereof will not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company irrevocable redemption within 60 days after the date of declaration thereofof the dividend or giving of the redemption notice, as the case may be, if at such the date of declaration date such declaration or notice, the dividend or redemption payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2) the payment making of any dividend payable from Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company (in each case, other than in connection with any Excluded Contribution or Sponsor Project Contribution); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from Section 4.07(a)(D)(ii) hereof; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate Company or any Subsidiary Guarantor with the net cash proceeds of, from a substantially concurrent incurrence Incurrence of Permitted Refinancing Indebtedness; (other than to 4) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary) of Subordinated Indebtedness Subsidiary of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms holders of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has its Equity Interests on a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notespro rata basis; (65) loans made to officersthe repurchase, directors redemption or employees other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed US$1.0 million in any twelve-month period; (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; (7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof; (8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary under, pursuant to or in connection with the CMA or the Reinvestment Agreement; (9) to the extent constituting Restricted Payments, the payment of Project Costs as permitted pursuant to the Disbursement Agreements; (10) Restricted Payments that are made with Excluded Contributions; (11) Restricted Payments made or deemed to be made with Excluded Project Revenues; provided the amount of such Restricted Payment will be excluded from Section 4.07(a)(D)(v); (12) the making of Restricted Payments, if applicable: (A) in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed $1,000,000 outstanding at US$1.0 million per annum; (B) in amounts required for any one timedirect or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which are have been contributed to the Company or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(D)(ii); (C) in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and (D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment; (13) any Restricted Payment used solely to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or Restricted Subsidiaries of the Company to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11; (14) payments to a direct or indirect parent company of the Company to reimburse such parent entity for reasonably documented costs and expenses associated with the development and construction of the Phase I Project incurred in the event the Company or any Restricted Subsidiary of the Company is unable to satisfy certain conditions to disbursement from the Note Proceeds Account (other than the condition that the funding of the Sponsors in an aggregate amount of US$825.0 million must be exhausted prior to any disbursement from the Note Proceeds Account) in accordance with the Note Disbursement and Account Agreement or under the Senior Secured Credit Facilities or from the Senior Disbursement Account in accordance with the Senior Disbursement Agreement; provided, the amount of any such payment does not exceed the net cash proceeds received by the Company since the Issue Date for the purposes described in this clause (14) either (a) as a contribution to purchase its common stock equity or from the issue or sale of Equity Interests (other than Disqualified Stock) of the Company (and the amount of any such proceeds will be excluded from Section 4.07(a)(D)(ii) or (b) from the proceeds of the issuance of Subordinated Shareholder Debt; provided, any such payments made in accordance with this clause (b) shall be made through repayment of such Subordinated Shareholder Debt (including, for the avoidance of doubt, through voluntary prepayment thereof); (15) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Crown Gaming; (16) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07; (17) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the Notes in connection with a restricted stock Change of Control Offer have been repurchased, redeemed or employee stock purchase plan, acquired for value; (18) payments or distributions to exercise stock options received dissenting stockholders of Capital Stock of the Company pursuant to an employee applicable law in connection with a consolidation, merger or director stock option plan transfer of all or other incentive plansubstantially all of the assets of the Company and its Restricted Subsidiaries, in taken as a principal amount not to exceed the exercise price whole, that complies with Section 5.01; provided that as a result of such stock optionsconsolidation, merger or transfer of assets, the Company shall have made a Change of Control Offer (bif required by this Indenture) to refinance loansand that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, together with accrued interest thereon, made pursuant to item (a) of this clause (6)redeemed or acquired for value; and (719) other Restricted Payments in an aggregate amount not to exceed $10,000,000US$10.0 million since the Issue Date; provided that the Opening Date has occurred, provided, however, that at the time of, and The actions described in after giving effect to, any Restricted Payment permitted under clauses (112), (313), (414) and (619) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)Section 4.07(b), no Default shall have occurred and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that continuing or would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) occur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) . The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Company shall use audited financial statements for the portions Board of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records Directors of the Company for the remaining portion of such period and (2) the Company shall whose resolution with respect thereto will be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith delivered to the CompanyTrustee as set forth in an Officer’s financial statements affecting Consolidated Net Income Certificate. The Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing if the Company for any periodFair Market Value exceeds US$30.0 million.

Appears in 2 contracts

Samples: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Crown Entertainment LTD)

Limitation on Restricted Payments. (a) The Company shall Borrower will not, and shall will not permit any of the Restricted Subsidiary Subsidiaries to, declare, pay or make, directly or indirectly, take the following actionsany Restricted Payment, except: (1a) the Borrower may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of its common stock; (b) Restricted Subsidiaries may declare and pay dividends ratably with respect to their Capital Stock; (c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management, employees or independent consultants of the Borrower and the Restricted Subsidiaries; (d) the Borrower may make Restricted Payments to pay any dividend onfor the repurchase, retirement or make any other distribution to holders of, any shares acquisition or retirement for value of Capital Stock of the Company Borrower or any direct or indirect Parent Entity or management investment vehicle held by any future, present or former employee, director, manager or consultant of the Borrower or any of its Subsidiaries, or their estates, descendants, family, spouse or former spouse pursuant to any management equity plan or stock option or phantom equity plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement; provided that, that (x) to the extent such Restricted Subsidiary Payments are required under any Franchise Agreement, there shall not be any limit on such redemption and payments, and (y) the aggregate Restricted Payments made under this clause (d) subsequent to the Closing Date (other than dividends or distributions payable solely any Restricted Payments made pursuant to any Franchise Agreement) do not exceed $2,500,000 in shares any calendar year (provided that any such amount unused in a calendar year may be carried forward and made in any subsequent calendar year; provided further that the aggregate amount of Qualified Capital Stock of Restricted Payments made under this clause (d), together with any amounts carried forward from the Company or prior year, do not exceed $3,500,000 in options, warrants or other rights to purchase Qualified Capital Stock of the Companyany calendar year); (2e) the Borrower may purchase, redeem or otherwise acquire Capital Stock issued by it with the proceeds received from the substantially concurrent issuance of its Capital Stock; (f) the Borrower may repurchase fractional shares of its Capital Stock arising out of stock dividends, splits or retire for value combinations, business combinations or conversions of convertible securities; (g) the Borrower or any Subsidiary may receive or accept the return to the Borrower or any Restricted Subsidiary of Capital Stock of the Company Borrower or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary constituting a portion of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement purchase price consideration in settlement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)indemnification claims; (3h) the Borrower or any Subsidiary may make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses distributions to dissenting stockholders pursuant to applicable law; (i) through so long as (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ix) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared continuing or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company would result therefrom at the time of such conversion declaration thereof and (y) with respect to Restricted Payments made in reliance on clauses (a) and/or (b) of the definition of “Available Amount” only, after giving effect thereto on a Pro Forma Basis, the Consolidated Total Leverage Ratio is not greater than 4.00:1.00, the Borrower or exchange; plusany Restricted Subsidiary may make Restricted Payments in an amount not to exceed the Available Amount; (Ej) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company Borrower or a Restricted Subsidiary after January 1by, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments Subsidiaries (other than Permitted Investments) in such Unrestricted Subsidiary made by Subsidiaries, the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.primary assets of which are cash and/or Cash Equivalents); (bk) Notwithstanding paragraph [reserved]; (al) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) continuing at the payment of any dividend on any Capital Stock of the Company within 60 days after the date time of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company Borrower or any Restricted Subsidiary approved may make additional Restricted Payments so long as, after giving effect thereto on a Pro Forma Basis, the Consolidated Total Leverage Ratio is not greater than 2.50:1.00; (i) payments made or expected to be made by the Board Borrower or any Restricted Subsidiary in respect of Directors withholding or similar taxes payable upon exercise of the Company in an aggregate amount not to exceed $1,000,000 outstanding at Capital Stock by any one timefuture, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock present or employee stock purchase planformer employee, director, manager, or consultant and repurchases of Capital Stock deemed to occur upon exercise of stock options received pursuant to an employee or director stock option plan or other incentive plan, in warrants if such Capital Stock represent a principal amount not to exceed portion of the exercise price of such options or warrants and (ii) payments or other adjustments to outstanding Capital Stock in accordance with any management equity plan, stock optionsoption plan or any other similar employee benefit plan, agreement or (b) to refinance loans, together arrangement in connection with accrued interest thereon, made pursuant to item (a) of this clause (6)any Restricted Payment; and (7n) the Borrower or any Restricted Subsidiary may purchase the Capital Stock of any Restricted Subsidiary or any other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be. For purposes of determining compliance with this covenant, pursuant to in the event that a proposed Restricted Payment. Payment (dor a portion thereof) In computing Consolidated Net Income under paragraph meets the criteria of clauses (a) abovethrough (n) of this Section 10.5, the Borrower will be entitled to classify or later reclassify (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available based on circumstances existing on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2reclassification) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would (or portion thereof) among such clauses (a) through (n), in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance a manner that otherwise complies with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodcovenant.

Appears in 2 contracts

Samples: Credit Agreement (Del Frisco's Restaurant Group, Inc.), Credit Agreement (Del Frisco's Restaurant Group, Inc.)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take indirectly (the payments and other actions described in the following actions:clauses being collectively “Restricted Payments”): (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary on its Equity Interests (other than dividends or distributions payable solely paid in shares of Qualified Capital Stock of the Company or in options, warrants any Parent Entity’s Qualified Equity Interests) held by Persons other than the Company or other rights to purchase Qualified Capital Stock any of the Company)its Restricted Subsidiaries; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (Parent Entity held by Persons other than the purchase, redemption, acquisition Company or retirement any of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)its Restricted Subsidiaries; (3iii) make any principal payment on or repurchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value, prior to or make any scheduled principal payment, scheduled sinking fund payment on or maturitywith respect to, any Subordinated Indebtedness Debt (excluding any intercompany Indebtedness between except (i) a payment of interest or among the Company and any of its Restricted Subsidiaries)principal at Stated Maturity, except in any case out each case, due within one year of the proceeds date of Permitted Refinancing Indebtednessrepayment, redemption, repurchase or defeasance or (ii) any Debt Incurred pursuant to Section 4.06(b)(2)); or (4iv) make any Restricted Investment other than a Permitted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)unless, unless at the time of of, and after giving effect to to, the proposed Restricted Payment: (I1) no Default or Event of Default shall have has occurred and be continuing;is continuing or would occur as a consequence thereof, (II2) either of the Relevant Conditions are satisfied at the time thereof, or the Company could incur Incur at least $1.00 of additional Indebtedness in accordance with Debt under Section 4.09(a) hereof; 4.06(a), and (III3) the aggregate amount of expended for all Restricted Payments declared made on or made after January 1the Issue Date would not, 2004 shall not subject to paragraph (c), exceed the sum (without duplication) of the followingof: (A) (i) in the event that either of the Relevant Conditions are not satisfied at the time thereof and after giving effect thereto, 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company amount of the loss) accrued on a cumulative basis during the period period, taken as one accounting period, beginning on January October 1, 2004 2020 and ending on the last day of the Company’s last most recently completed fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited internal financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.available; or

Appears in 2 contracts

Samples: Indenture (UWM Holdings Corp), Indenture (UWM Holdings Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the net cash proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (all such payments or other actions described in these clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed such Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur Incur $1.00 of additional Indebtedness in accordance with the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof); and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 2015, shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 2015, and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be is a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, received after January 1, 2004 2015, by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, received after January 1, 2004 2015, by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 2015, by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 2015, from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 20042015. (b) Notwithstanding paragraph (a) abovethe preceding provisions, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below8) of this Section 4.07(b)) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of the preceding paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) abovethe preceding paragraph); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds offrom, a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchasepurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence Incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); (7) the repurchase of Equity Interests deemed to occur upon the exercise of stock or other equity options to the extent such Equity Interests represent a portion of the exercise price of those stock or other equity options and any repurchase or other acquisition of Equity Interests is made in lieu of or to satisfy withholding taxes in connection with any exercise or exchange of stock options, warrants, incentives or other rights to acquire Equity Interests; and (7) 8) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and 35,000,000. (c) The actions described in clauses (1), (3), (4) and (6) of this paragraph (bSection 4.07(b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (bSection 4.07(b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (aSection 4.07(a)(III) (provided that any dividend paid pursuant to clause (1) of this paragraph (bSection 4.07(b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (aSection 4.07(a)(III) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5), (7) and (7) 8) of this paragraph (bSection 4.07(b) shall be permitted to be taken in accordance with this paragraph clause (c) and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (aSection 4.07(a)(III). (cd) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of its Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable (i) solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire shares of such Qualified Capital Stock of or (ii) to the CompanyCompany or a Restricted Subsidiary); (2ii) purchase, redeem redeem, defease or otherwise acquire or retire for value value, directly or indirectly, (including, without limitation, in connection with any merger or consolidation involving the Company) shares of the Company’s Capital Stock or shares of any Capital Stock of any direct or indirect parent of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on on, or repurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or Maturity, any Indebtedness that is subordinated to the Securities or the Guarantees, other than the payment, repurchase, redemption, defeasance, retirement or other acquisition made in anticipation of satisfying a principal payment, sinking fund payment or final maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any each case out due within one year of the proceeds date of Permitted Refinancing Indebtednesssuch payment, repurchase, redemption, defeasance, retirement or other acquisition; or (4iv) make any Restricted Investment in any Person (other than a Permitted Investment); (such payments or other any of the foregoing actions described in clauses (i) through (iv) above being collectively referred to ), other than any such action that is a Permitted Payment (as defined below), collectively, “Restricted Payments”), unless at (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; (2) the time Company could, immediately before and immediately after giving effect to such Restricted Payment on a pro forma basis, incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 1008; and (3) after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) , the aggregate amount of all such Restricted Payments declared or made after January 1March 12, 2004 shall not exceed the sum 2010 (without duplicationincluding Permitted Payments permitted by clause (b)(i) of the followingdefinition of Permitted Payments but excluding all other Permitted Payments) is less than the sum, without duplication, of: (A) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 2010 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed the Restricted Payment (Payment, or, if such aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) 100% of the aggregate Net Cash Proceeds, or Proceeds and the Fair Market Value of Property assets other than cash, cash received after January 1March 12, 2004 2010 by the Company either (x) as capital contributions in the form of common equity to the Company, (y) from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, Company or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants convertible or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock exchangeable debt securities that have been converted into or exchanged for such Qualified Capital Stock (other than Qualified Capital Stock, Disqualified Stock or debt securities sold to a Subsidiary of the Company) or (z) upon the exercise (other than an exercise by a Subsidiary) of any options or warrants or rights to purchase Qualified Capital Stock of the Company (excluding, in the case of each of the foregoing clause (y) and (z), such Net Cash Proceeds and the Fair Market Value of any assets received for any such issuance, sale or exercise that is financed, directly or indirectly, using funds borrowed by the Company or any Restricted Subsidiary until and to the extent such borrowing is repaid); plus (C) the amount by which Indebtedness or Disqualified Stock incurred or issued subsequent to March 12, 2010 is reduced on the Company’s consolidated balance sheet upon the conversion or exchange (other than from any of its Subsidiaries) into Qualified Capital Stock of the Company (less the amount of any cash, together with or the Fair Market Value of any other asset distributed by the Company or any Subsidiary upon such conversion or exchange); provided that such amount shall not exceed the aggregate cash net proceeds received by the Company at or any Restricted Subsidiary after March 12, 2010 from the time issuance and sale (other than to a Restricted Subsidiary of the Company) of such conversion Indebtedness or exchangeDisqualified Stock; plus (D) to the extent that any Investment that is not a Permitted Investment and that was made on or after March 12, 2010 has been or is sold for cash or otherwise liquidated or repaid, purchased or redeemed for cash, the lesser of (i) such cash (less the cost of disposition, if any) and (ii) the amount of such Investment; plus (E) to the extent not otherwise included in the calculation of Consolidated Net IncomeIncome of the Company for such period for purposes of clause (A) above, 100% of the net reduction in Investments (other than Permitted Investments) in Unrestricted Subsidiaries any Person other than the Company or a Restricted Subsidiary resulting from dividends, repayments repayment of loans or advances, advances or other transfers of assets, in each case to the Company or any Restricted Subsidiary; plus (F) to the extent not otherwise included in the calculation of Consolidated Net Income of the Company for such period for purposes of clause (A) above, 100% of any distributions, dividends or interest payments received by the Company or a Restricted Subsidiary on and after January 1March 12, 2004 2010 from an Unrestricted Subsidiary (other than distributions, dividends or interest payments received from an EchoPark Entity that is an Unrestricted Subsidiary to the extent such distributions, dividends or interest payments are distributed or paid as dividends or interest, in each case, pursuant to Section 1009(b)(xvi)(C)) or other Investment (other than a Permitted Investment); plus (G) to the extent that any Unrestricted Subsidiary or from of the redesignation of Company (other than an EchoPark Entity that has been designated as an Unrestricted Subsidiary after the Issue Date) has been or is re-designated as a Restricted Subsidiary on or after March 12, 2010, the lesser of (valued i) the Fair Market Value of the Company’s Investment in each case such Subsidiary as provided in of the definition date of “Investment”), not to exceed in such re-designation and (ii) such Fair Market Value as of the case date on which such Subsidiary was originally designated as an Unrestricted Subsidiary; plus (H) any amount which previously qualified as a Restricted Payment on account of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made Guarantee entered into by the Company or any Restricted Subsidiary; provided, that such Guarantee has not been called upon and its Restricted Subsidiaries in the obligation arising under such Unrestricted Subsidiary after January 1, 2004Guarantee no longer exists. (b) Notwithstanding paragraph (a) abovethe foregoing, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have has occurred and is continuing or would be continuingcaused thereby (except that the immediately preceding limitation shall not apply in the case of clause (i) below, and clause (xvi) shall only be subject to the limitation that no Event of Default has occurred and is continuing or would be caused thereby), the foregoing provision will not apply to or prohibit: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date of declaration, such declaration payment would have complied with the provisions of paragraph this Indenture; (aii) above (and such payment shall be deemed to have been paid on such date of declaration for purposes the redemption, repurchase, retirement, defeasance or other acquisition of any calculation required by subordinated Indebtedness of the provisions Company or any Guarantor or of paragraph any Qualified Capital Stock of the Company, or the making of any Investment, in exchange for, or out of the net cash proceeds of the substantially concurrent sale (aother than to a Restricted Subsidiary of the Company) aboveof, or capital contribution in respect of, Qualified Capital Stock of the Company (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition or any such Investment will be excluded from Section 1009(a)(3)(B); (2iii) the defeasance, redemption, repurchase or other acquisition of Indebtedness of the Company or any Guarantor that is subordinated to the Securities or the Guarantees with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of any dividend payable from or the payment or distribution by a Restricted Subsidiary of the Company to the holders of its Capital Stock on a pro rata basis; (v) the purchase, redemption, or other acquisition or retirement for value of any class of Capital Stock of the Company from employees, former employees, directors or former directors of the Company or any other Restricted Subsidiary in an amount not to exceed $5.0 million in the aggregate in any twelve-month period plus the aggregate cash proceeds received by the Company during such twelve-month period from any reissuance of Capital Stock by the Company to members of management of the CompanyCompany or any Restricted Subsidiary; provided that the Company may carry over and make in a subsequent twelve-month period, in addition to the amount otherwise permitted for such twelve-month period, the amount of such purchase, redemptions or other acquisitions for value permitted to have been made but not made in any preceding twelve-month period; (3vi) the repurchase, redemption or other acquisition or retirement of any shares of any class for value of Capital Stock of the Company issued pursuant to acquisitions by the Company to the extent required by or needed to comply with the requirements of any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, Manufacturers with which the Company or a substantially concurrent issue and sale (other than Restricted Subsidiary is a party to a franchise agreement; (vii) the payment of the contingent purchase price or the payment of the deferred purchase price, including holdbacks (and the receipt of any corresponding consideration therefor), of an acquisition to the extent any such payment would be deemed a Restricted SubsidiaryPayment and would otherwise have been permitted by this Indenture at the time of such acquisition; (viii) the repurchase of Capital Stock deemed to occur upon exercise of stock options to the extent that shares of Qualified such Capital Stock represent a portion of the exercise price of such options; (ix) the payment of cash in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible or exercisable for Capital Stock of the Company; (4x) payments or distributions to stockholders pursuant to appraisal rights required under applicable law in connection with any consolidation, merger or transfer of assets that complies with Section 801; (xi) the payment of cash dividends on the Company’s Qualified Capital Stock in the aggregate amount per fiscal quarter up to or equal to $0.15 per share for each share of the Company’s Qualified Capital Stock outstanding as of the quarterly record date for dividends payable in respect of such fiscal quarter (as such amount shall be adjusted for changes in the capitalization of the Company upon recapitalizations, reclassifications, stock splits, stock dividends, reverse stock splits, stock consolidations and similar transactions, provided, however, in the event a Change of Control occurs, the aggregate amounts permitted to be paid in cash dividends per fiscal quarter shall not exceed the aggregate amounts of such cash dividends paid in the same fiscal quarter most recently occurring prior to such Change of Control, provided, further, that for purposes of this exception, shares of Qualified Capital Stock issued for less than Fair Market Value (other than shares issued pursuant to options or otherwise in accordance with the Company’s stock option, employee stock purchase or other equity compensation plans) shall not be deemed outstanding); (xii) the repurchase, redemption, repayment, defeasance redemption or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company (in the event such Capital Stock is not owned by the Company or any of its Restricted Subsidiaries) in an amount not to exceed $25.0 million in any fiscal year with unused amounts carried over to the succeeding fiscal year, subject to a maximum of $50.0 million in any fiscal year; (xiii) the declaration and payment of dividends to holders of any class or series of Preferred Stock of the Company issued or incurred in compliance with Section 1008 to the extent such dividends are included in the definition of “Consolidated Fixed Charge Coverage Ratio”; (xiv) Restricted Payments not to exceed $200.0 million under this clause (xiv) in the aggregate, plus, to the extent Restricted Payments made pursuant to this clause (xiv) are Investments made by the Company or any of its Restricted Subsidiaries in any Person and such Investment is sold for cash or otherwise liquidated or repaid, purchased or redeemed for cash, an amount equal to the lesser of such (A) cash (less the cost of disposition, if any) and (B) the amount of such Restricted Payment; provided that the amount of such cash will be excluded from Section 1009(a)(3)(D); (xv) other Restricted Payments, so long as the Consolidated Total Leverage Ratio of the Company and its Restricted Subsidiaries on a consolidated basis is no greater than 3.0 to 1.0 determined on a pro forma basis for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such Restricted Payment; and (xvi) (A) the designation of any EchoPark Entity as an Unrestricted Subsidiary, (B) at any time as an EchoPark Entity is an Unrestricted Subsidiary, any distribution, as a dividend or otherwise, of all or any portion of the equity interests of such EchoPark Entity or the proceeds (in the form of cash or non-cash consideration) of the sale of equity interests of such EchoPark Entity or the assets of the EchoPark Business, (C) at any time as an EchoPark Entity constitutes an Unrestricted Subsidiary, any Restricted Payment in an amount equal to all of the distributions, proceeds, dividends and interest payments (in the form of cash or non-cash consideration) received by the Company or a Restricted Subsidiary from such EchoPark Entity since such EchoPark Entity was designated as an Unrestricted Subsidiary, or (D), at any time as an EchoPark Entity constitutes an Unrestricted Subsidiary, payments that would otherwise constitute Restricted Payments in respect of transactions in the ordinary course of business between the Company or any Restricted Subsidiary, on the one hand, and such EchoPark Entity, on the other, in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely 5.0 million; (a) to purchase common stock each of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in foregoing clauses (1i)-(xvi), (3a “Permitted Payment”), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) . The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Indenture (Sonic Automotive Inc), Indenture (Sonic Automotive Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiary Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and other than dividends or in options, warrants distributions payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) its direct or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)indirect parents; (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness of the Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing IndebtednessStated Maturity thereof; or (4) make any Restricted Investment; , (all such payments or and other actions described set forth in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence thereof; (IIB) the Company could incur $would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with Section 4.09(a) hereof; and (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after by the Company and its Restricted Subsidiaries since the Measurement Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b)) pursuant to this Indenture, is less than the sum of: (i) 75% of the EBITDA of the Company less 2.00 times Fixed Charges for the period (taken as one accounting period) from January 1, 2004 shall not exceed 2019 to the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day end of the Company’s last most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be EBITDA for such period is a lossdeficit, minus 100% of such lossdeficit); plus (Bii) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company since the Measurement Date as a contribution to its common equity capital or from the issuance issue or sale of Equity Interests (other than to any of its Restricted SubsidiariesDisqualified Stock) of shares of Qualified Capital Stock of the Company (in each case, other than in connection with any Excluded Contribution) or any options, warrants from the issue or rights to purchase such shares sale of Qualified Capital convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plus (Eiii) to the extent not otherwise included in Consolidated Net Income, that any Restricted Investment that was made after the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Measurement Date (x) is reduced as a result of loans or advances, or other transfers payments of assets, in each case dividends to the Company or a Restricted Subsidiary after January 1of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, 2004 from (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus (iv) to the extent that any Unrestricted Subsidiary or from of the redesignation of an Unrestricted Subsidiary Company designated as such after the Measurement Date is re-designated as a Restricted Subsidiary after the Measurement Date, the lesser of (valued i) the Fair Market Value of the Company’s Restricted Investment in each case such Subsidiary as provided of the date of such re-designation or (ii) the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the definition date such entity was originally designated as an Unrestricted Subsidiary through the date of “Investment”), not to exceed in such re-designation; plus (v) 100% of the case aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the total amount Company after the Measurement Date or 100% of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made any dividends received by the Company and its or a Restricted Subsidiaries in such Subsidiary of the Company after the Measurement Date from an Unrestricted Subsidiary after January 1, 2004of the Company. (b) Notwithstanding paragraph (aThe provisions of Section 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuinghereof will not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company irrevocable redemption within 60 days after the date of declaration thereofof the dividend or giving of the redemption notice, as the case may be, if at such the date of declaration date such declaration or notice, the dividend or redemption payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2) the payment making of any dividend payable from Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to the Company (in each case, other than in connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from Section 4.07(a)(4)(C)(ii) hereof; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate Company or any Subsidiary Guarantor with the net cash proceeds of, from a substantially concurrent incurrence Incurrence of Permitted Refinancing Indebtedness; (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a4) the principal amount payment of such new Indebtedness does not exceed the principal amount any dividend (or, if such Subordinated Indebtedness being refinanced provides for an amount less than in the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount case of any premium required to be paid in connection with such refinancing pursuant partnership or limited liability company, any similar distribution) by a Restricted Subsidiary to the terms holders of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has its Equity Interests on a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notespro rata basis; (65) loans made to officersthe repurchase, directors redemption or employees other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company held by any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed US$1.0 million in any twelve-month period; (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options; (7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof; (8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA; (9) [RESERVED]; (10) Restricted Payments that are made with Excluded Contributions; (11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed $1,000,000 outstanding at US$2.0 million per annum; (12) the making of Restricted Payments, if applicable: (A) in amounts required for any one timedirect or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum; (B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which are used solely have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii); (aC) to purchase common stock in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and (D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment; (13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11; (14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino); (15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07; (16) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the Notes in connection with a restricted stock Change of Control Offer have been repurchased, redeemed or employee stock purchase plan, acquired for value; (17) payments or distributions to exercise stock options received dissenting stockholders of Capital Stock of the Company pursuant to an employee applicable law in connection with a consolidation, merger or director stock option plan transfer of all or other incentive plansubstantially all of the assets of the Company and its Restricted Subsidiaries, in taken as a principal amount not to exceed the exercise price whole, that complies with Section 5.01; provided that as a result of such stock optionsconsolidation, merger or transfer of assets, the Company shall have made a Change of Control Offer (bif required by this Indenture) to refinance loansand that all Notes tendered by holders in connection with such Change of Control Offer have been repurchased, together with accrued interest thereon, made pursuant to item (a) of this clause (6)redeemed or acquired for value; and (718) other Restricted Payments in an aggregate amount not to exceed $10,000,000; US$15.0 million since the Issue Date, provided, however, that at the time of, and The actions described in after giving effect to, any Restricted Payment permitted under clauses (112), (3), (413) and (618) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)Section 4.07(b), no Default shall have occurred and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that continuing or would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) occur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) . The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Company shall use audited financial statements for the portions Board of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records Directors of the Company for whose resolution with respect thereto will be delivered to the remaining portion of such period and (2) the Company shall be permitted to rely Trustee as set forth in good faith on the financial statements and other financial data derived from the books and records an Officer’s Certificate of the Company that are available on the date of determinationCompany. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the The Company’s financial statements affecting Consolidated Net Income Board of Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the Company for any periodFair Market Value exceeds US$45.0 million.

Appears in 2 contracts

Samples: Indenture (Melco Resorts & Entertainment LTD), Indenture (Melco Resorts & Entertainment LTD)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare Declare or pay any dividend on, or make any other distribution to holders payment on account of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants set apart assets for a sinking or other rights to purchase Qualified Capital Stock of the Company); (2) purchaseanalogous fund for, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasedefeasance, redeemretirement, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption termination or other acquisition or retirement of of, any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange forwhether now or hereafter outstanding, or out make any other distribution in respect thereof, in each case either directly or indirectly, whether in cash or property or in obligations of the aggregate Net Cash Proceeds ofCompany or any Restricted Subsidiary (collectively, “Restricted Payments”), except that: (a) (i) any Restricted Subsidiary may make Restricted Payments to the Company or any Subsidiary Guarantor and (ii) any Restricted Subsidiary that is not a substantially concurrent issue and sale (Subsidiary Guarantor may make Restricted Payments to any other than to a Restricted Subsidiary; (b) the Company may make Restricted Payments in the form of shares of Qualified Capital Stock common stock of the Company; (4c) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of Company may purchase the Company; (5) the purchase’s common stock, redemptioncommon stock options, repaymentrestricted stock, defeasance restricted stock units and similar securities from present or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to former officers, directors or employees of the Company or any Restricted Subsidiary approved upon the death, disability or termination of employment of such officer, director or employee, provided that the aggregate amount of payments made pursuant to this paragraph (c) (net of any proceeds received by the Board Company in connection with resales of Directors any common stock, common stock options, restricted stock, restricted stock units and similar securities) shall not exceed $10,000,000 during any fiscal year; (d) the Company may make Restricted Payments in connection with the redemption, repurchase, retirement or other acquisition of any Capital Stock of the Company upon or in connection with the exercise or vesting of warrants, options, restricted stock units or similar rights if such Capital Stock constitutes all or a portion of the exercise price or is surrendered (or deemed surrendered) in connection with satisfying any income tax obligation incurred in connection with such exercise or vesting; (e) the Company may make cash payments (i) solely in lieu of the issuance of fractional shares in connection with the exercise of warrants, options, restricted stock units or other securities convertible into or exchangeable for Capital Stock of the Company; provided that any such cash payment shall not be for the purpose of evading the limitations of this Section 7.06 and (ii) to officers, directors, employees and consultants in respect of phantom stock, to the extent considered a Restricted Payment; (f) any non-wholly owned Restricted Subsidiary may, to the extent a Restricted Payment is made to the Company or another Restricted Subsidiary under this Section 7.06, make Restricted Payments to its other shareholders on a pro rata basis; (g) (i) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) the Company shall be in compliance with the Minimum Liquidity Test at the time of the proposed Restricted Payment and immediately after giving effect thereto, as certified by the Company to the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to the Administrative Agent), the Company may make Restricted Payments in connection with the redemption, repurchase, retirement or other acquisition of any Capital Stock of the Company; provided that the aggregate amount of payments made pursuant to this Section 7.06(g) in any fiscal year shall not exceed the sum of (x) $25,000,000 and (y) the aggregate amount of cash paid to the Company for its account in such fiscal year upon the exercise or vesting of warrants, options, restricted stock units or similar rights by officers, directors or employees of the Company or its Restricted Subsidiaries in such fiscal year (it being agreed that if any portion of such permitted amount is not used in any fiscal year, then 50% of such unused portion may be used in any subsequent fiscal year and any such carried over amount shall be deemed used first in such subsequent fiscal year); (h) the Company may make additional cash Restricted Payments pursuant to this clause (h) in an aggregate amount not to exceed $1,000,000 outstanding the Available Amount at any one timesuch time (as determined immediately before giving effect to the making of such Restricted Payment) so long as (A) no Default or Event of Default then exists or would result therefrom, (B) the proceeds Company would at the time of which are used solely and immediately after giving effect to such Restricted Payment be in compliance with (ai) the Interest Coverage Ratio Covenant and (ii) a Total Net Leverage Ratio of not greater than 2.00 to purchase common stock 1.00, in each case, determined on a Pro Forma Basis giving effect to such Restricted Payment as of the last day of the most recently ended Test Period and (C) the Company shall be in connection compliance with a restricted stock or employee stock purchase planthe Minimum Liquidity Test at the time of the proposed Restricted Payment and immediately after giving effect thereto, or as certified by the Company to exercise stock options received pursuant the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6Administrative Agent); and; (7i) other the Company may make Restricted Payments in an aggregate amount not to exceed $10,000,00025,000,000 in any fiscal year; and (j) the Company may make a Specified Distribution so long as (i) the Company would, immediately after giving effect to such Specified Distribution be in compliance with the Financial Covenants, determined on a Pro Forma Basis giving effect to such Specified Distribution as of the last day of the most recently ended Test Period (and The actions described in clauses (1assuming for such purposes the repayment, tender, repurchase, redemption, defeasance or discharge of any Indebtedness repaid, tendered, repurchased, redeemed, defeased or discharged substantially simultaneously with such Specified Distribution), (3), (4ii) no Default or Event of Default exists or will result therefrom and (6iii) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made substantially simultaneously with such Specified Distribution, all outstanding Term Loans are repaid in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)full. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 2 contracts

Samples: Credit Agreement (Harsco Corp), Amendment to Credit Agreement (Harsco Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take any of the following actions:: 77 67 (1a) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company or any of its Restricted Subsidiary (Subsidiaries other than (i) dividends or distributions payable solely in Qualified Equity Interests of the issuer of such shares of Qualified Capital Stock of Stock, (ii) dividends or distributions by a Restricted Subsidiary payable to the Company or another Restricted Subsidiary or (iii) pro rata dividends or distributions on common stock of a Restricted Subsidiary held by minority stockholders, provided that such dividends do not in options, warrants or other rights to purchase Qualified Capital Stock the aggregate exceed the minority stockholders' pro rata share of such Restricted Subsidiary's net income from the first day of the Company)'s fiscal quarter during which the Closing Date occurs; (2b) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire shares of Capital Stock) of (i) the Company or any of its Unrestricted Subsidiaries or (ii) any Restricted Subsidiary that are held by any Affiliate of the Company (other than, in either case, any such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of owned by the Company solely in shares or any of Qualified Capital Stock of the Companyits Restricted Subsidiaries); (3c) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing IndebtednessDebt; orand (4d) make any Restricted Investment (other than a Permitted Investment; ) in any Person (such payments or other actions described in (but not excluded from) clauses (ia) through (ivd) above being collectively referred to as "Restricted Payments"), unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment: (Ii) no Default or Event of Default shall have occurred and be continuing;, (IIii) the Company could incur at least $1.00 of additional Indebtedness in accordance with Debt (other than Permitted Debt) pursuant to Section 4.09(a) hereof1009; and (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Closing Date does not exceed the sum (without duplication) of the followingof: (A) 50the remainder of (x) 100% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during Cash Flow for the period beginning on January 1, 2004 the first day of the Company's fiscal quarter during which the Closing Date occurs and ending on the last day of the Company’s last 's most recent fiscal quarter for which internal financial statements are available ending prior to the date of such proposed Restricted Payment (or, if such the "Computation Period") minus (y) the product of 1.4 times the sum of (i) Consolidated Net Income shall be a loss, minus 100% Fixed Charges for the Computation Period and (ii) all dividends or other distributions paid in cash by the Company or any of such loss); plusits Restricted 78 68 Subsidiaries on any Disqualified Stock of the Company or any of its Restricted Subsidiaries for the Computation Period, (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net proceeds received after January 1, 2004 by the Company after the Closing Date (including the fair market value of property other than cash as determined by the Company's Board of Directors, whose good faith determination shall be conclusive) from the issuance or sale (other than to any of its Restricted Subsidiariesa Subsidiary) of shares of Qualified Capital Stock Equity Interests of the Company or (excluding from this computation any optionsnet proceeds of a Public Equity Offering received by the Company that are used by it to redeem the Notes, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plusas discussed above), (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net proceeds received after January 1, 2004 by the Company after the Closing Date (including the fair market value of property other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of cash as determined by the Company; plus (D's Board of Directors, whose good faith determination shall be conclusive) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiariesa Subsidiary) of Indebtedness debt securities or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate net cash proceeds received by the Company at the time of such conversion or exchange; plus, (D) without duplication, the Net Cash Proceeds received by the Company or a Wholly Owned Restricted Subsidiary upon the sale of any of its Unrestricted Subsidiaries, and (E) to $5,000,000. Notwithstanding the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) aboveforegoing, the Company and any of its Restricted Subsidiaries may take any of the following actions so actions, as long as (in the case of with respect to clauses (3), (4), (5f) and (7g) below) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur: (1a) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such the declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to would not have been paid on such date of declaration for purposes of any calculation required prohibited by the provisions of paragraph (a) above)foregoing provision; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3b) the repurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryCompany, in exchange for, or out of the aggregate Net Cash Proceeds of, net cash proceeds of a substantially concurrent issue issuance and sale (other than to a Subsidiary) of, Qualified Equity Interests of the Company; (c) the purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Debt in exchange for, or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Restricted Subsidiary) of shares of of, Qualified Capital Stock of the Company;; 79 69 (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5d) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) Debt in exchange for, or out of the aggregate net cash proceeds of, of a substantially concurrent incurrence issuance or sale (other than to a Restricted Subsidiary) of of, Subordinated Indebtedness of the Company Debt, so long as the Company or a Restricted Subsidiary would be permitted to refinance such original Subordinated Debt with such new Subordinated Debt pursuant to clause (axi) of the definition of Permitted Debt; (e) the repurchase of any Subordinated Debt at a purchase price not greater than 101% of the principal amount of such new Indebtedness does not exceed Subordinated Debt in the principal amount (orevent of a "change of control" in accordance with provisions similar to Section 1011; provided that, if prior to such Subordinated Indebtedness being refinanced provides repurchase, the Company has made the Change of Control Offer as provided in such Section with respect to the Notes and has repurchased all Notes validly tendered for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid payment in connection with such refinancing Change of Control Offer; (f) the payment by the Company to Citadel Communications for the purpose of the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of Citadel Communications, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) or by any employee benefit plan, upon death, disability, retirement or termination of employment or pursuant to the terms of any employee benefit plan or any other agreement under which such shares of stock or related rights were issued; provided that the Indebtedness refinanced aggregate cash consideration paid for such purchase, redemption, acquisition, cancellation or other retirement of such shares of Capital Stock after the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses date of the Company incurred Closing Date does not exceed $1,000,000 in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notesany fiscal year; (6g) loans made or advances to officers, directors or and employees of Citadel Communications, the Company or any of its Restricted Subsidiary approved by Subsidiaries made in the Board ordinary course of Directors of business after the Company Closing Date in an aggregate principal amount not to exceed $1,000,000 outstanding at any one timetime outstanding; or (h) payments to or on behalf of Citadel Communications to pay its operating and administrative expenses attributable to the Company, the proceeds of which are used solely (a) to purchase common stock including, without limitation, legal and audit expenses, directors' fees, fees payable in respect of the Company in connection with a restricted stock or employee stock purchase plantrustee and back-up trustees under the Voting Trust Agreement, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive planand Commission compliance expenses, in a principal an amount not to exceed the exercise price greater of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) $1,000,000 per fiscal year and 1% of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and the net revenues of the Company for the preceding fiscal year. The actions payments described in clauses (1b), (3c), (4e), (f) and (6g) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made taken in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under the foregoing clause (3) of paragraph iii), and the payments described in clauses (a), (d) and (provided that any dividend paid pursuant to clause (1h) of this paragraph (b) shall reduce the amount be Restricted Payments that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this 80 70 paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under the foregoing clause (3iii). For the purpose of making any calculations under this Indenture (i) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company shall be deemed to have made an Investment in an amount equal to the fair market value of paragraph the net assets of such Restricted Subsidiary at the time of such designation as determined by the Board of Directors of the Company, whose good faith determination shall be conclusive, (a). ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at fair market value at the time of such transfer, as determined by the Board of Directors of the Company, whose good faith determination shall be conclusive and (ciii) The subject to the foregoing, the amount of any Restricted Payment, if other than cash, shall be determined by the Board of Directors of the Company, whose good faith determination shall be conclusive. If the aggregate amount of all Restricted Payments (calculated under the foregoing provision includes an Investment in an Unrestricted Subsidiary or other than cash) will Person that thereafter becomes a Restricted Subsidiary, such Investment shall no longer be the Fair Market Value on the date of the counted as a Restricted Payment for purposes of calculating the asset(saggregate amount of Restricted Payments. If an Investment resulted in the making of a Restricted Payment, the aggregate amount of all Restricted Payments calculated under the foregoing provision shall be reduced by the amount of any net reduction in such Investment (resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise), to the extent such net reduction is not included in Consolidated Adjusted Net Income; provided that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (x) or securities proposed to be transferred or issued the cash proceeds received by the Company or and any of its Restricted Subsidiaries in connection with such Restricted Subsidiary, as net reduction and (y) the case may be, pursuant to the Restricted Payment. (d) initial amount of such Investment. In computing Consolidated Adjusted Net Income under paragraph for purposes of the foregoing clause (a) aboveiii)(A), (1i) the Company shall may use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2ii) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment whichthat, at the time of the making of such Restricted Payment Payment, would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s 's financial statements affecting Consolidated Adjusted Net Income of the Company for any period.. 81 71

Appears in 1 contract

Samples: Indenture (Citadel Communications Corp)

Limitation on Restricted Payments. (a) The Except as otherwise provided in this Section 1009, the Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: make any Restricted Payment if (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the such proposed Restricted Payment: (I) no , a Default or Event of Default shall have occurred and be continuing; continuing or shall occur as a consequence of such Restricted Payment, (II2) the Company could incur would, at the time of such Restricted Payment and after giving pro forma effect thereto, have been prohibited from incurring at least $1.00 of additional Indebtedness pursuant to the Cash Flow Ratio test in accordance with Section 4.09(a1007(a) hereof; and or (III3) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or that shall have been made after January 1, 2004 shall not since the date of this Indenture would exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior $25.0 million plus an amount equal to the date difference between (i) the Cumulative Cash Flow Credit and (ii) 1.4 multiplied by Cumulative Interest Expense. For purposes of such proposed this Section 1009, the amount of any Restricted Payment (orPayment, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the shall be based upon Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Value. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case The foregoing provisions of clauses (3), (4), (5) and (7) below) no Default or Event of Default this Section 1009 shall have occurred and be continuingnot prevent: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date such declaration payment complied with the foregoing provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Section 1009; (2) the payment retirement, redemption, purchase, defeasance or other acquisition of any dividend payable from shares of the Company’s Capital Stock or warrants, rights or options to acquire Capital Stock of the Company, in exchange for, or out of the proceeds of a Restricted Subsidiary sale (within one year before or 180 days after such retirement, redemption, purchase, defeasance or other acquisition) of, other shares of the Company’s Capital Stock or warrants, rights or options to the Company or any other Restricted Subsidiary acquire Capital Stock of the Company; (3) the repurchase, redemption or other acquisition or retirement payment of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to dividend by a Restricted Subsidiary) Subsidiary to the holders of shares of Qualified Capital Stock of the Companyits common Equity Interests on a pro rata basis; (4) the repurchaserepurchases of Equity Interests in a cashless transaction deemed to occur upon exercise or vesting of restricted stock, redemption, repayment, defeasance stock options or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Companywarrants; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value declaration and payment of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced dividends or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued distributions by the Company or such a Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of or the making of such Restricted Payment would loans or advances to pay, in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.each case without duplication:

Appears in 1 contract

Samples: Indenture (Cablevision Systems Corp /Ny)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of its Capital Stock to holders of such Capital Stock other than the Company or any of its Restricted Subsidiaries; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on on, or repurchasepurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany other than the principal payment on, or the purchase, redemption, defeasance, retirement or other acquisition for value of, (i) Subordinated Indebtedness between made in satisfaction of or among the Company and any anticipation of its Restricted Subsidiaries)satisfying a sinking fund obligation, except in any case out principal installment or final maturity within one year of the proceeds due date of Permitted Refinancing Indebtednesssuch obligation, installment or final maturity) and (ii) Indebtedness permitted under Section 4.03(b)(6); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses Section 4.04(a)(1), (i2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless if at the time of and such Restricted Payment or immediately after giving effect thereto: (A) a Default or an Event of Default shall have occurred and be continuing; (B) the Company is not able to Incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03; or (C) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made after the Issue Date (the amount expended for such purpose, if other than in cash, being the Fair Market Value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of (without duplication): (i) 50 percent of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100 percent of such loss) of the Company earned during the period beginning on the first day of the fiscal quarter commencing on July 1, 2013 and through the end of the most recent fiscal quarter for which financial statements are available prior to the date such Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); plus (ii) the aggregate net cash proceeds or Fair Market Value of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) since the Issue Date as a contribution to its common equity capital or from the issuance and sale of Qualified Capital Stock of the Company or from the issuance of Indebtedness of the Company subsequent to the Issue Date that has been converted into or exchanged for Qualified Capital Stock of the Company on or prior to the Reference Date; plus (iii) an amount equal to the sum of (1) the net reduction in the Investments (other than Permitted Investments, but including Investments in Unrestricted Subsidiaries) made by the Company or any Restricted Subsidiary in any Person after the Issue Date resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds (including the Fair Market Value of property other than cash) realized on the sale of such Investment and proceeds representing the return of capital, in each case received by the Company or any Restricted Subsidiary, (2) the amount of any Guarantee or similar arrangement that has terminated or expired or by which it has been reduced to the extent that it was treated as a Restricted Payment after the Issue Date that reduced the amount available under this Section 4.04(a)(C) or Section 4.04(b)(11) net of any amounts paid by the Company or a Restricted Subsidiary in respect of such Guarantee or similar arrangement; provided, however, that the amounts set forth in subclauses (1) and (2) of this clause (iii) above shall not exceed, in the case of any such Person, the amount of Investments (excluding Permitted Investments) previously made and treated as a Restricted Payment by the Company or any Restricted Subsidiary after the Issue Date that reduced the amount available under this Section 4.04(a)(C) or Section 4.04(b)(11) in such Person or Unrestricted Subsidiary; plus (iv) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Company or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Company) of the Investment of the Company or the Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment). (b) Notwithstanding the foregoing, the provisions set forth in Section 4.04(a) do not prohibit: (I1) the payment of any dividend or the consummation of any redemption within 60 days after the date of declaration of such dividend or giving notice of such redemption, as the case may be, if the dividend or redemption would have been permitted on the date of declaration or notice; (2) a Restricted Payment, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or substantially concurrent cash contribution to the common equity of the Company; (3) so long as no Default or Event of Default shall have occurred and be continuing, repurchases, redemptions or other acquisitions of Capital Stock (or rights or options therefor) of the Company from current or former officers, directors, employees or consultants or their respective estates, spouses, former spouses or family members pursuant to equity ownership or compensation plans or stockholders agreements not to exceed $50.0 million in the aggregate subsequent to the Issue Date; (II4) dividends and distributions paid on Common Stock of a Restricted Subsidiary on a pro rata basis or on a basis more favorable to the Company; (5) any purchase or redemption of Subordinated Indebtedness utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of Sections 4.05 and Section 4.17; (6) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company could incur $1.00 or Disqualified Capital Stock or Preferred Stock of additional Indebtedness any Restricted Subsidiary issued in accordance with Section 4.09(a) hereof4.03; andprovided that such dividends are included in Consolidated Fixed Charges; and payment of any mandatory redemption price or liquidation value of any such Disqualified Capital Stock or Preferred Stock when due in accordance with its terms in effect upon the issuance of such Disqualified Capital Stock or Preferred Stock; (III7) the aggregate amount any purchase, redemption, defeasance, retirement, payment or prepayment of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum principal of Subordinated Indebtedness either (without duplicationi) solely in exchange for shares of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day Qualified Capital Stock of the Company’s last fiscal quarter ending prior to , (ii) through the date application of such proposed Restricted Payment (or, if such Consolidated Net Income shall be net proceeds of a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or substantially concurrent sale for cash (other than to any a Subsidiary of its Restricted Subsidiariesthe Company) of shares of Qualified Capital Stock of the Company or any options(iii) Refinancing Indebtedness; (8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represents all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or rights to purchase such shares upon the conversion or exchange of Qualified Capital Stock of the Company; plus; (C9) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Transaction and the aggregate Net Cash Proceeds, or the Fair Market Value payment and distribution of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plusrelated fees; (D10) the aggregate Net Cash Proceeds received after January 1Restricted Payments if, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of making such conversion or exchange; plus payments, and after giving effect thereto (E) to the extent not otherwise included in Consolidated Net Incomeincluding, without limitation, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Incurrence of loans or advances, or other transfers of assets, in each case any Indebtedness to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”finance such payment), the Total Leverage Ratio would not exceed 3.75 to exceed in 1.00; provided, however, that at the case time of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in each such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1Payment, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: continuing (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6result therefrom); and (711) other Restricted Payments in an aggregate amount not to exceed the greater of (a) $10,000,000; 500.0 million and The actions described (b) 7.5 percent of Total Assets in the aggregate since the Issue Date. (c) In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with Section 4.04(a)(C), amounts expended pursuant to clauses (1), (32)(ii), (47)(ii), (10) and (611) of this paragraph (bSection 4.04(b) shall be Restricted Payments that shall be permitted to be made included in accordance such calculation. (d) For the purposes of determining compliance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause covenant, (1) a Restricted Payment or Permitted Investment need not be permitted solely by reference to one category of this paragraph permitted Restricted Payments (bor any portion thereof) shall reduce or Permitted Investments (or any portion thereof) described in the amount above clauses or the definitions thereof but may be permitted in part under any combination thereof and (2) in the event that would otherwise be available under clause a Restricted Payment (3or any portion thereof) or Permitted Investment (or any portion thereof) meets the criteria of paragraph more than one of the types of Restricted Payments (aor any portion thereof) when declaredor Permitted Investments (or any portion thereof) described in the above clauses or the definitions thereof, but not also when subsequently paid pursuant the Issuer, in its sole discretion, may divide and classify, and from time to time may divide and reclassify (based on circumstances existing at the time of such clause (1)division or reclassification), such Restricted Payment (or any portion thereof) or Permitted Investment (or any portion thereof) if it would have been permitted at the time such Restricted Payment or Permitted Investment was made and at the actions described in clauses (2time of any such reclassification, except that the Issuer may not reclassify any Restricted Payment or Permitted Investment as having been made under Section 4.04(b)(10) if originally made under another clause of Section 4.04(b), (5under Section 4.04(a)(C) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)or as a Permitted Investment. (ce) The amount In connection with any commitment, definitive agreement, declaration, notice, action or similar event relating to the payment or making of all an Investment or Restricted Payments (other than cash) will be Payment, the Fair Market Value Company, the Issuer or applicable Restricted Subsidiary may designate such Investment or Restricted Payment as having occurred on the date of the commitment, definitive agreement, declaration, notice, action or similar event relating thereto (such date, the “Election Date”) if, after giving pro forma effect to such Investment or Restricted Payment and all related transactions in connection therewith and any related pro forma adjustments, the Company, the Issuer or any of the asset(s) its Restricted Subsidiaries would have been permitted to make such Investment or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of Payment on the relevant period for which audited financial statements are available on the date of determination Election Date in compliance with this Indenture, and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment whichany related subsequent actual declaration, at the time of the payment or making of such Investment or Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall will be deemed for all purposes under this Indenture to have been made in on such Election Date, including, without limitation, for purposes of calculating any ratio, compliance with this Indenture notwithstanding any subsequent adjustments test, usage of any baskets hereunder (if applicable) and Consolidated EBITDA and for purposes of determining whether there exists any Default or Event of Default (and all such calculations on and after such Election Date until the termination, expiration, passing, rescission, retraction or rescindment of such commitment, definitive agreement, declaration, notice, action or similar event shall be made on a pro forma basis giving effect thereto and all related transactions in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodconnection therewith).

Appears in 1 contract

Samples: Indenture (Dana Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary Subsidiary, to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders on or in respect of, any shares of its Capital Stock of (including any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary (other than Company), except dividends or distributions payable solely in shares of Qualified its Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase Qualified such Capital Stock of and except dividends or distributions payable solely to the Company); Company or any Restricted Subsidiary, (2ii) purchase, redeem redeem, retire or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (held by Persons other than the Company or a Restricted Subsidiary, (iii) purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for valuevalue (including pursuant to mandatory repurchase covenants), prior to any scheduled principal paymentrepayment, scheduled sinking fund payment or other scheduled maturity, any Subordinated Indebtedness Obligation or (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment (other than a Permitted Investment; ) in any Person (any such payments dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or other actions described in clauses (i) through (iv) above Investment being collectively herein referred to as a "Restricted Payments”Payment"), unless if at the time of and after giving effect to the proposed Restricted Payment: (I1) no a Default or Event of Default shall have occurred and be continuingcontinuing (or would result therefrom); (II2) the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with under Section 4.09(a) hereof4.3(a)(i); andor (III3) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors, whose determination shall be evidenced by a Board Resolution furnished to the Trustee) declared or made after January 1since the Issue Date, 2004 shall not exceed would exceed, without duplication. the sum (without duplication) of the followingof: (A) an amount equal to 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) beginning on the first day of the fiscal quarter of the Company accrued on a cumulative basis during immediately following the period beginning on January 1, 2004 fiscal quarter in which the Issue Date occurs and ending on the last day of the Company’s 's last fiscal quarter ending ended at least 45 days prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a lossdeficit, minus 100% of such loss); plusdeficit) and minus 100% of the amount of any write-downs, writeoffs, other negative revaluations and other negative extraordinary charges not otherwise reflected in Consolidated Net Income during such period; (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 by the Company from the issuance issue or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock, including Capital Stock of the Company issued upon conversion of convertible debt or any the exercise of options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with but excluding Disqualified Stock, subsequent to the aggregate cash received Issue Date (other than an issuance or sale to (i) a Subsidiary of the Company, (ii) an employee stock ownership plan or other trust established by the Company at or any of its Subsidiaries or (iii) management employees); (C) the time amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the Company or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash or other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); plusand (ED) the amount equal to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from (i) payments of dividends, repayments of loans or advances, advances or other transfers of assets, in each case assets to the Company or a any Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary Subsidiaries or from (ii) the redesignation of an Unrestricted Subsidiary Subsidiaries as a Restricted Subsidiary Subsidiaries (valued in each case as provided in the definition of "Investment”), ") not to exceed exceed, in the case of any Unrestricted Subsidiary Subsidiary, the total amount of Investments previously made (other than Permitted Investmentsand treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Subsidiary. (b) Notwithstanding paragraph The provisions of Section 4.5(a) shall not prohibit: (ai) aboveany purchase or redemption of Capital Stock of the Company or Subordinated Obligations made in exchange for, or out of the proceeds of a substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries) or out of proceeds of an equity contribution made substantially concurrently with such purchase or redemption; provided, however, that (A) such purchase or redemption shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the calculation of amounts under Section 4.5(a)(3)(B); (ii) any purchase or redemption of Subordinated Obligations made in exchange for, or out of the proceeds of the substantially concurrent sale of, Indebtedness of the Company which is permitted to be Incurred pursuant to Section 4.3; provided, however, that (A) such Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate sum of (1) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of such Subordinated Obligations being so purchased or redeemed and (2) any premiums, fees and other expenses paid by the Company or any Restricted Subsidiary in connection with such purchase or redemption, (B) such Indebtedness is at least as subordinated to the Securities as such Subordinated Obligations so purchased or redeemed and its the covenants relating to such Indebtedness are no more restrictive in the aggregate than those of such Subordinated Obligations, (C) such Indebtedness has a Stated Maturity no earlier than the Stated Maturity of such Subordinated Obligations, (D) such Indebtedness has an Average Life at the time such Indebtedness is Incurred equal to or greater than the Average Life of such Subordinated Obligations and (E) such purchase or redemption shall be excluded in the calculation of the amount of Restricted Subsidiaries may take Payments; (iii) any payment in cash in lieu of the following actions issuance of fractional shares of Capital Stock to any Holder of Capital Stock warrants of the Company outstanding on the Issue Date pursuant to the exchange of such warrants for other Capital Stock of the Company upon the exercise of such warrants pursuant to the terms thereof; provided, however, that such payment shall be excluded in the calculation of the amount of Restricted Payments; (iv) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with Section 4.5(a); provided, however, that at the time of payment of such dividend, no other Default shall have occurred and be continuing (or result therefrom); provided, further, however, that such dividend shall be included in the calculation of the amount of Restricted Payments from and after the date of declaration of such dividend; or (v) so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) continuing or would occur as a consequence thereof, the payment redemption or repurchase of any dividend on any Capital Stock of the Company, options in respect thereof or related rights pursuant to and in accordance with the repurchase provisions of any employee stock option or any stock purchase or other agreement between the Company within 60 days and any of its management employees; provided, however, that such redemptions or repurchases pursuant to this Section 4.5(b)(v) from and after the date of declaration thereofIssue Date shall not in the aggregate exceed $1,000,000, if at such declaration date such declaration complied with plus the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes amount of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary net cash proceeds to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class from sales of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant management employees subsequent to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Issue Date. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Anacomp Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Companyor except pursuant to a Permitted Investment) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out of the proceeds Net Cash Proceeds of any Permitted Refinancing Indebtedness; Indebtedness referred to in clause (ix) of the definition thereof, or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, shall be the amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 4.09(a10.11(a) hereof; and hereof and (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Series A Issue Date shall not exceed the sum (without duplication) of the following: (A1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January August 1, 2004 1996 and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); , plus (B2) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Series A Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; , plus (C3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Series A Issue Date by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; , plus (D4) the aggregate Net Cash Proceeds received after January 1, 2004 the Series A Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; , plus (E5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the Series A Issue Date from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of Investment), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1that which was previously treated as a Restricted Payment, 2004plus (6) $2,500,000. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5ii) and (7iii) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company or any Restricted Subsidiary within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3ii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;; and (4iii) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and . The actions described in clauses (1i), (3), (4ii) and (6iii) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3C) of paragraph (a) (), provided that any dividend paid pursuant to clause (1i) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3C) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (ai). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s 's financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Veritas DGC Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, declare or make, or agree to make, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary Payment unless: (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no Event of Default or event which, with the giving of notice or the lapse of time will become an Event of Default shall have occurred and be continuing; continuing at the time of, or after giving effect to such Restricted Payment; and (IIb) immediately after giving effect to such Restricted Payment, the Company could incur $would be able to Incur at least US$1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted InvestmentsIndebtedness) in such Unrestricted Subsidiary made by pursuant to Section 10.10. Notwithstanding the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1preceding paragraph, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingthis Section 10.11 does not prohibit: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereofof such dividend if the dividend would have been permitted on the date of declaration pursuant to the preceding paragraph; (ii) any Restricted Payment, if at such declaration date such declaration complied with the provisions of paragraph (a) above in exchange for Capital Stock of the Company (and such payment shall be deemed to have been paid on such date other than Disqualified Capital Stock); or (b) through the application of declaration for purposes of any calculation required the net cash proceeds received by the provisions of paragraph (a) above); (2) the payment of any dividend payable Company from a Restricted Subsidiary to substantially concurrent sale of Capital Stock (other than Disqualified Capital Stock) of the Company or any other a contribution to the equity capital of the Company not representing an interest in Disqualified Capital Stock, in each case not received from a Restricted Subsidiary of the Company; (3iii) the repurchasevoluntary prepayment, purchase, defeasance, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness solely in exchange for, or out through the application of the aggregate Net Cash Proceeds from, net cash proceeds of a substantially concurrent issue and sale (sale, other than to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; , of: (5a) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness Capital Stock (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (Company; or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Gas Transporter of the South Inc)

Limitation on Restricted Payments. (a) The Company shall notnot make, and shall not permit any Restricted Subsidiary toto make, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless Payment if at the time of of, and after giving effect to the to, such proposed Restricted Payment: (I1) no a Default or Event of Default shall have occurred and be continuing; (II2) the Company could not incur at least $1.00 of additional Indebtedness in accordance with Debt pursuant to clause (1) of Section 4.09(a) hereof4.06(a); andor (III3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made after January 1since the Issue Date (the amount of any Restricted Payment, 2004 shall not if made other than in cash, to be based upon Fair Market Value) would exceed the sum (without duplication) of the following:of (A) 50100% of the Company's Cumulative Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of EBITDA minus 1.4 times the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or's Cumulative Consolidated Interest Expense, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) 100% of the aggregate Net Cash Proceedsnet proceeds (after deduction of fees, or expenses, discounts and commissions incurred in connection with issuance and sale) and the Fair Market Value of securities or other Property other than cash, received after January 1, 2004 by the Company from the issuance issue or sale sale, after the Issue Date, of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company issued to any Restricted Subsidiary of the Company; ) of the Company or any Debt or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which have been so converted or exercised or exchanged, as the case may be, plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004$10.0 million. (b) Notwithstanding paragraph (a) abovethe foregoing limitation, the Company and may: (1) pay dividends on its Restricted Subsidiaries may take Capital Stock within 60 days of the following actions so long as (declaration thereof if, on said declaration date, such dividends could have been paid in compliance with this Indenture; PROVIDED, HOWEVER, that such dividend shall be included in the case calculation of clauses the amount of Restricted Payments; (2) purchase, repurchase, redeem, legally defease, acquire or retire for value (x) Capital Stock of the Company or Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Capital Stock and other than Capital Stock issued or sold to a Subsidiary of the Company), and (y) Disqualified Capital Stock of the Company in exchange for, or out of the proceeds of the substantially concurrent sale of (other than to a Subsidiary of the Company) Disqualified Capital Stock of the Company that has a redemption date, and requires the payment of current dividends in cash, no earlier than the Disqualified Capital Stock being purchased, redeemed or otherwise acquired or retired; PROVIDED, HOWEVER, that (A) such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments and (B) the Capital Stock Sale Proceeds from such exchange or sale shall be excluded from the calculation pursuant to clause (a)(3)(B) above; (3) purchase, repurchase, redeem, legally defease, acquire or retire for value any Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Debt or Debt permitted under clause (k) of the definition of "Permitted Debt"; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments; (4) repurchase shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (4)including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell, or are granted the option to purchase or sell, shares of such common stock; PROVIDED, HOWEVER, that: (5A) and the aggregate amount of such repurchases shall not exceed $1.0 million in any calendar year and (7B) below) at the time of such repurchase, no other Default or Event of Default shall have occurred and be continuing: continuing (1) or result therefrom); PROVIDED FURTHER, HOWEVER, that such repurchases shall be included in the payment of any dividend on any Capital Stock calculation of the Company within 60 days after the date amount of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)Restricted Payments; (25) the payment as long as no Default or Event of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the Default has occurred and is continuing, purchase, repurchase, redemption redeem, legally defease, acquire or other acquisition or retirement of any shares of any class of Capital retire for value outstanding Preferred Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined consideration received by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by from any Spectrum Sale as permitted under Section 4.10; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the Board of Directors calculation of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); andRestricted Payments; (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) as long as no Default or Event of this paragraph Default has occurred and is continuing, pay cash dividends (bnot constituting a return on capital) shall be Restricted Payments on the Existing Preferred Stock under the terms related to the payment of dividends on the Existing Preferred Stock as in effect on the Issue Date and described under "Description of Material Indebtedness and Preferred Stock" in the Offering Memorandum; PROVIDED, HOWEVER, that shall be permitted any cash dividends paid with respect to be made in accordance with this paragraph (b) but the Existing Preferred Stock shall reduce the amount that would amounts otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that Payments; and PROVIDED FURTHER, HOWEVER, in no event shall any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.such

Appears in 1 contract

Samples: Indenture (Paxson Communications Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company (other than dividends or distributions payable solely in shares of its Qualified Capital Stock or in options, warrants or other rights to acquire such shares of Qualified Capital Stock); (ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock any Affiliate of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment (other than any Permitted Investment; ) in any Person (such payments or any other actions described in (but not excluded from) clauses (i) through (iv) above being are collectively referred to as "Restricted Payments"), unless at the time of of, and immediately after giving effect to on a pro forma basis to, the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (I1) no Default or Event of Default shall have occurred and be continuing; , (II2) the Company could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance with the provisions described in Section 4.09(a) hereof; and 4.3 and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the followingof: (A) 50% of the aggregate cumulative Consolidated Adjusted Net Income of the Company accrued on a cumulative basis during the period beginning on January July 1, 2004 1997 and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Adjusted Net Income shall be a loss, minus 100% of such lossamount); , plus (B) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of shares of Qualified Capital Stock of the Company or any optionswarrants, warrants options or rights to purchase such shares of Qualified Capital Stock of the Company; , plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value 100% of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plusdebt securities or (ED) to the extent not otherwise included in the Consolidated Adjusted Net IncomeIncome of the Company, an amount equal to the net reduction in Investments (other than reductions in Unrestricted Subsidiaries Permitted Investments) in any Person resulting from payments in cash of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers returns of assetscapital, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the date of the Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), such Person not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made Persons by the Company and its Restricted Subsidiaries Subsidiaries, plus (E) $10 million, plus (F) without duplication, the sum of (1) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments, (2) the net cash proceeds received by the Company or any Subsidiary from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company) and (3) upon redesignation of an Unrestricted Subsidiary as a Subsidiary, the fair market value of such Subsidiary; provided, however, that with respect to all Investments made in any Unrestricted Subsidiary or joint venture, the sum of clauses (1), (2) and (3) above with respect to such Investment shall not exceed the aggregate amount of all such Investments made subsequent to the Issue Date in such Unrestricted Subsidiary after January 1, 2004or joint venture. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries any Subsidiary may take the following actions so long as (in the case of with respect to clauses (3ii), (4iii), (5iv), (v), (vi) and (7) vii), below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date the payment of such declaration dividend would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any the calculation required by the provisions of paragraph (a) above); (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company or any Restricted Subsidiarywarrants, rights or options to acquire shares of Capital Stock, in exchange for, or out of the aggregate Net Cash Proceeds of, of a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of of, shares of Qualified Capital Stock of the Company; (4iii) the repurchasepurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness or Redeemable Capital Stock in exchange for, or out of the aggregate Net Cash Proceeds from, of a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of of, shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Atlas Air Inc)

Limitation on Restricted Payments. (a) The Company shall notwill not make, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actionsmake, any Restricted Payment, unless: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or immediately after giving effect to such Restricted Payment; (IIb) immediately after giving pro forma effect to such Restricted --- ----- Payment, the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) 4.6 hereof; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared (except to the extent not made on the payment date) or made after January 1, 2004 shall the Issue Date does not exceed the sum of (without duplication) of the following: (A1) 50% of the cumulative Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior subsequent to the date of such proposed Restricted Payment Issue Date (or, if such Consolidated Net Income shall be a loss, or minus 100% of any cumulative deficit in Consolidated Net Income during such loss); plus period) and (B2) 100% of the aggregate Net Cash Proceeds, Proceeds and the fair market value of securities or the Fair Market Value of Property other than cash, property received after January 1, 2004 by the Company from the issuance issue or sale sale, after the Issue Date, of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock or Capital Stock of the Company or issued to any options, warrants or rights to purchase such shares of Qualified Capital Stock Subsidiary of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than from any of its Restricted SubsidiariesDis qualified Capital Stock) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus Company which has been so converted or exercised or exchanged, as the case may be, and (D3) $3,000,000. For purposes of determining under this clause (c) the aggregate Net Cash Proceeds received after January 1amount expended for Restricted Payments, 2004 by cash distributed shall be valued at the Company from the issuance or sale (face amount thereof and property other than to any of cash shall be valued at its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of fair market value. Notwithstanding the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Incomeforegoing, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments provisions of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary this Section 4.9 shall not prohibit (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company distribution within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied payment would comply with the provisions of paragraph this Indenture, (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiarysubordinated Indebtedness by conversion into, or by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of, the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock of the Company (other than Disqualified Capital Stock), (iii) the redemption or retirement of Indebtedness of the Company subordinated to the Notes in exchange for, by conversion into, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale or incurrence of Indebtedness (other than any Indebtedness owed to a Subsidiary) of the Company that is contractually subordinated in right of payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired, (iv) the retirement of any shares of Disqualified Capital Stock by conversion into, or by exchange for, shares of Disqualified Capital Stock, or out of the Net Proceeds of the substantially concur rent sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of other shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (bv) such new Indebtedness is subordinated Permitted Tax Distributions, (vi) additional payments to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company for repurchases of, stock or any Restricted Subsidiary approved by repurchases pursuant to the Board of Directors of Company's Nonqualified Stock Option Plan; provided, however, that the Company in an aggregate amount of all such payments under this -------- ------- clause (vi) does not to exceed $1,000,000 outstanding 2,000,000 in the aggregate, exclusive of amounts funded by insurance proceeds; and provided, further, that with respect to clause -------- ------- (vi) (other than with respect to payments funded by insurance proceeds) no Default or Event of Default shall have occurred and be continuing at the time of any one timesuch distribution or payment or will occur immediately after giving effect to any such distribution or payment; and provided, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase planfurther, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive planthat, in a principal amount not to exceed determining -------- ------- the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments made subsequent to the Issue Date, all distributions or payments made pursuant to clause (other vi) (exclusive of insurance proceeds) shall be included. Not later than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the making any Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers' Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in is permitted and setting forth the good faith determination of basis upon which the Company calculations required by this Section 4.9 were computed, which calculations may be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to based upon the Company’s 's latest available financial statements affecting Consolidated Net Income statements, and that no Default or Event of the Company for Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any periodRestricted Payments.

Appears in 1 contract

Samples: Indenture (Pierce Leahy Corp)

Limitation on Restricted Payments. (a) The Fedders Corporation and the Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders ofon account of Fedders Corporation's, any shares of the Company's or such Restricted Subsidiary's Capital Stock of the Company or any Restricted Subsidiary other Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock or other Equity Interests (other than Disqualified Stock) of Fedders Corporation or the Company and dividends or distributions payable by a Restricted Subsidiary, the Company or in optionsFedders Corporation to a Restricted Subsidiary, warrants the Company or other rights to purchase Qualified Capital Stock of the CompanyFedders Corporation); ; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock or other Equity Interests of Fedders Corporation, the Company or any Affiliate thereof Restricted Subsidiaries; (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between of Fedders Corporation or among the Company and any that is subordinate or junior in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessSecurities; or or (4iv) make any Restricted Investment; Investment (all such payments or other actions described in clauses (i) through (iv) above dividends, distributions, purchases, redemptions, acquisitions, retirements, prepayments and Restricted Investments being collectively referred to as "Restricted Payments"), unless if, at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no a Default or Event of Default shall have occurred and be continuing;continuing or shall occur as a consequence thereof; or (IIb) the Company could incur immediately after such Restricted Payment and after giving pro forma effect thereto, Fedders Corporation shall not be able to issue $1.00 of additional Indebtedness in accordance with pursuant to paragraph (a) of Section 4.09(a) hereof4.04; andor (IIIc) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1the Issue Date, 2004 shall not exceed without duplication, exceeds the sum of (without duplication) of the following: (A1) 50% of the aggregate Consolidated Net Income (including, for this purpose, gains or losses from Asset Sales) of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment Fedders Corporation (or, if in case such Consolidated Net Income shall be aggregate is a loss, minus 100% of such loss); plus ) for the period (Btaken as one accounting period) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after from January 1, 2004 by the Company from the issuance or sale (other than to any 2006 and ended as of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company Fedders Corporation's most recently ended fiscal quarter at the time of such Restricted Payment; plus (2) 100% of the aggregate net cash proceeds and the fair market value of any property or securities (as determined by the Board of Directors in good faith) received by Fedders Corporation from the issue or sale of Capital Stock or other Equity Interests of Fedders Corporation subsequent to the Issue Date (other than (w) Capital Stock or other Equity Interests issued or sold to Fedders Corporation, the Company or a Restricted Subsidiary, (x) the issuance or sale of Disqualified Stock, (y) the Capital Stock of NYCOR North America, Inc. and its Subsidiaries contributed to the Company and (z) other than Excess Proceeds contributed to Fedders Corporation or the Company for purposes of making an Asset Sale Offer in accordance with Section 4.05); plus (3) the amount by which the principal amount of and any accrued interest on either (A) Indebtedness of Fedders Corporation or the Company or (B) any Indebtedness of any Restricted Subsidiary is reduced on Fedders Corporation's consolidated balance sheet upon the conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or exchange other transfers of assets, in each case to than by the Company or a Restricted Subsidiary after January 1subsequent to the Issue Date of any Indebtedness of Fedders Corporation, 2004 from the Company or any Unrestricted Restricted Subsidiary (not held by Fedders Corporation, the Company or from any Restricted Subsidiary) for Capital Stock or other Equity Interests (other than Disqualified Stock) of Fedders Corporation or the redesignation Company, as the case may be, (less the amount of an Unrestricted any cash, or the fair market value of any other property or securities (as determined by the Fedders Corporation Board of Directors in good faith), distributed by Fedders Corporation, the Company or any Restricted Subsidiary (to Persons other than Fedders Corporation, the Company or any other Restricted Subsidiary) upon such conversion or exchange); plus (4) if any Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary, the value of the Restricted Payment that would result if such Subsidiary (valued were redesignated as a Non-Restricted Subsidiary at such time, as determined in each case as provided in accordance with Section 4.16(b). Notwithstanding the definition of “Investment”)foregoing, not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. paragraphs (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7c) below) no Default or Event of Default shall have occurred and be continuingnot prohibit as Restricted Payments: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration said date such declaration complied with the provisions of paragraph (a) above (and declaration, such payment would comply with all covenants of this Indenture (including, but not limited to, this Section 4.06); provided that payments made pursuant to this paragraph shall be deemed to have been paid on such date of declaration count as a Restricted Payment for purposes of any the calculation required by the provisions of in paragraph (ac) above)of this Section 4.06; (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Companyintentionally omitted; (3iii) intentionally omitted; (iv) the redemption, repurchase, redemption retirement or other acquisition or retirement of any shares of any class of Capital Stock or other Equity Interests of Fedders Corporation, the Company or any Restricted Subsidiary, Subsidiary in exchange for, or out of the aggregate Net Cash Proceeds proceeds of, a the substantially concurrent issue and sale (other than to a Restricted SubsidiarySubsidiary of Fedders Corporation or the Company) of shares of Qualified other Capital Stock or other Equity Interests of Fedders Corporation or the Company; Company (4other than any Disqualified Stock) or the redemption, repurchase, redemption, repayment, defeasance retirement or other acquisition or retirement for value of any Subordinated Indebtedness Capital Stock or other Equity Interests of any Restricted Subsidiary in exchange for, or out of the aggregate Net Cash Proceeds fromproceeds of, a the substantially concurrent issue and sale (other than to Fedders Corporation, the Company or a Subsidiary of Fedders Corporation or the Company) of other Capital Stock or other Equity Interests of such Restricted Subsidiary; provided that, in each case, any net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition, and any Net Income resulting therefrom, shall be excluded from paragraph (c) of shares of Qualified Capital Stock of the Companythis Section 4.06; (5v) the purchase, redemption, repayment, defeasance Restricted Investments made or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid received in connection with such refinancing pursuant to the terms of the Indebtedness refinanced sale, transfer or the amount disposition of any premium reasonably determined by the Company as necessary to accomplish such refinancingbusiness, plus the amount properties or assets of expenses of the Company incurred in connection with such refinancingFedders Corporation, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by Subsidiary; provided that, if such sale, transfer or disposition constitutes an Asset Sale and Fedders Corporation and the Board Company complies with the provisions of Directors Section 4.05, such Restricted Investments shall not count as a Restricted Payment for purposes of the Company calculation in an aggregate amount not paragraph (c) of this Section 4.06; (vi) intentionally Omitted; (vii) intentionally Omitted; (viii) any cash advances or loans to exceed $1,000,000 outstanding at Fedders Corporation or any one time, the proceeds of which are used solely (a) to purchase common stock of the Company Non-FNA Subsidiaries made in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received ordinary course of business cash management practices of Fedders Corporation and its Subsidiaries; provided that amounts paid pursuant to an employee or director stock option plan or other incentive plan, this clause (viii) shall not count as a Restricted Payment for purposes of the calculation in a principal amount not to exceed the exercise price of such stock options, or paragraph (b) to refinance loans, together with accrued interest thereon, made pursuant to item (ac) of this clause Section 4.06; (6)ix) intentionally omitted; (x) one or more dividends or other distributions to Fedders Corporation to the extent they consist of the Capital Stock of or other Equity Interests in each of Fedders Indoor Air Quality (Suzhou) Co., Ltd., Xi'an Fedders Dong Fang Air Conditioner Compressor Co., Ltd. and Qxxxxxxx Xelcor Hua Yu Thermoelectric Co., Ltd.; provided, however, xxxx (A) prior to the payment of such dividends neither the Company nor any Subsidiary Guarantor shall have contributed or otherwise transferred to any such persons any material assets other than in the ordinary course of business consistent with past practice, (B) substantially concurrent with such dividend or other distribution, Fedders Corporation contributes such Capital Stock to Fedders International, Inc. or one of its Subsidiaries and (C) such dividends shall not count as Restricted Payments for purposes of the calculation in paragraph (c) of this Section 4.06; and (7xi) other Restricted Payments in an aggregate amount which, when taken together with all Restricted Payments pursuant to this clause (xi) does not to exceed $10,000,0009,000,000 from the date hereof; provided that payments made pursuant to this paragraph (xi) shall not be for the payment of any dividend in respect of Fedders Corporation's Series A Cumulative Preferred Stock and The actions described shall count as a Restricted Payment for purposes of the calculation in clauses paragraph (1), (3), (4) and (6c) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Section 4.06. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: First Supplemental Indenture and Waiver (Fedders Corp /De)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or any other distribution on any Capital Stock of the Company or any Restricted Subsidiary or make any other payment or distribution to the direct or indirect holders of, any shares (in their capacities as such) of Capital Stock of the Company or any Restricted Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in shares the form of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company Company, any Restricted Subsidiary or any Affiliate thereof of their Affiliates (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of owned by the Company solely in shares of Qualified Capital Stock of the Companyor any Restricted Subsidiary); (3) make any principal payment on or repurchasepurchase, redeem, defease or otherwise acquire or retire for value, or make any principal payment on, prior to any scheduled principal paymentmaturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding other than any intercompany Subordinated Indebtedness between or among held by the Company and or any of its Restricted SubsidiariesSubsidiary), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; Investment in any Person (other than Permitted Investments) (any such payments payment or other actions action (other than any exception thereto) described in clauses clause (i1), (2), (3) through or (iv4) above being collectively referred to as “above, a "Restricted Payments”Payment"), unless at the time of and after giving effect to the proposed Company or such Restricted Subsidiary makes such Restricted Payment: (IA) no Default or Event of Default shall have occurred and be continuingcontinuing at the time or immediately after giving effect to such Restricted Payment; (IIB) immediately after giving effect to such Restricted Payment, the Company could incur would be able to Incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) hereof4.10; and (IIIC) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after January 1, 2004 shall the Issue Date does not exceed an amount equal to the sum (without duplication) of the followingof: (Ai) 50% of the cumulative Consolidated Net Income determined for the period (taken as one period) from the beginning of the Company accrued on a cumulative basis during the period first fiscal quarter beginning on January 1, 2004 or after the Issue Date and ending on the last day of the Company’s last most recent fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment for which consolidated financial information of the Company is available (or, or if such cumulative Consolidated Net Income shall be a loss, minus 100% of such loss); , plus (Bii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 the Issue Date by the Company either (x) as capital contributions to the Company or (y) from the issuance or issue and sale (other than to any a Subsidiary) of its Restricted Subsidiaries) of shares of Qualified Capital Stock (except, in each case, to the extent such proceeds are used to purchase, redeem, retire, defease or otherwise acquire Capital Stock or Subordinated Indebtedness as set forth in Section 4.09(b)(2) or (3) and excluding the net proceeds from any issuance and sale of (I) Qualified Capital Stock financed, directly or indirectly, using funds borrowed from the Company or any Subsidiary until and to the extent such borrowing is repaid, (II) Redeemable Convertible Preferred Stock pursuant to an option granted to the initial purchasers of the Redeemable Convertible Preferred Stock issued and sold on the Issue Date or (III) common stock of the Company pursuant to the overallotment option granted to the underwriters of the common stock issued and sold on the Issue Date), plus (iii) the principal amount (or accreted amount, determined in accordance with GAAP, if less) of any Indebtedness of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of Restricted Subsidiary Incurred after the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have Issue Date which has been converted into or exchanged for Qualified Capital Stock of the CompanyCompany (except, together with in each case, to the aggregate cash received by the Company at the time of extent such conversion proceeds are used to purchase, redeem, retire, defease or exchange; otherwise acquire Subordinated Indebtedness as set forth in Section 4.09(b)(3)), plus (Eiv) in the case of the disposition or repayment of any Investment or the release of a guarantee constituting a Restricted Payment made after the Issue Date, an amount (to the extent not otherwise included in the computation of Consolidated Net Income, ) equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments lesser of loans or advances, or other transfers (x) the return of assetscapital with respect to such Investment and (y) the amount of such Investment which was treated as a Restricted Payment, in each either case, less the cost of the disposition of such Investment and net of taxes, and, in the case of guarantees, less any amounts paid under such guarantee, plus (v) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with respect to the Company or any Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary after January 1the Issue Date in accordance with Section 4.14, 2004 from the Company's proportionate interest in an amount equal to the excess of (x) the Total Assets of such Subsidiary, valued on an aggregate basis at Fair Market Value, over (y) the total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any Unrestricted Subsidiary or from case exceed the redesignation of an Unrestricted Subsidiary as a Designation Amount with respect to such Restricted Subsidiary (valued in each case as provided in the definition of “Investment”upon its Designation), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingThe foregoing provisions will not prevent: (1) the payment of any dividend on any or distribution on, or redemption of, Capital Stock of the Company within 60 days after the date of declaration thereofof such dividend or distribution or the giving of formal notice of such redemption, if at the date of such declaration date or giving of such declaration complied formal notice such payment or redemption would comply with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption redemption, retirement or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of the substantially concurrent issue and sale (other than to a Subsidiary) of, other Capital Stock of the Company (other than Disqualified Capital Stock in the case of any such purchase, redemption, retirement or other acquisition of Qualified Capital Stock); provided, however, that any such net cash proceeds and the value of any Qualified Capital Stock issued in exchange for such retired Capital Stock are excluded from Section 4.09(a)(C)(ii) above (and were not included therein at any time); (3) the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness, or any other payment thereon, made in exchange for, or out of the net cash proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of of: (A) Qualified Capital Stock of the Company; provided, however, that any such net cash proceeds and the value of any Qualified Capital Stock issued in exchange for Subordinated Indebtedness are excluded from Sections 4.09(a)(C)(ii) and (a)(C)(iii) (and were not included therein at any time) or (B) Disqualified Capital Stock of the Company or other Subordinated Indebtedness having no stated maturity for the payment of any portion of principal thereof prior to the final stated maturity of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired and having a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired; (4) Restricted Payments not to exceed $10.0 million in the aggregate since the Issue Date; (5) on or prior to the second anniversary of the Issue Date, payments of regular cash dividends on the Redeemable Convertible Preferred Stock, payable quarterly in arrears, at the rate per annum set forth in the certificate of designations relating to the Redeemable Convertible Preferred Stock, as in effect on the Issue Date; (6) the repurchase, redemption, repayment, defeasance redemption or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved held by the Board of Directors any director, officer or employee of the Company in an or any Subsidiary; provided that the aggregate amount price paid for all such repurchased, redeemed, acquired or retired Capital Stock shall not to exceed $1,000,000 outstanding at 2.0 million in any one time, the proceeds twelve-month period; (7) repurchases of which are used solely (a) to purchase common stock Capital Stock of the Company deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof, and repurchases of Capital Stock of the Company deemed to occur upon the withholding of a portion of the Capital Stock issued, granted or awarded to any director, officer or employee of the Company to pay for the taxes payable by such director, officer or employee upon such issuance, grant or award in order to satisfy, in whole or in part, withholding tax requirements in connection with the exercise of such options, in accordance with the provisions of an option or rights plan or program of the Company; and (8) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% or 100% of the principal amount of such subordinated Indebtedness in connection with a restricted stock or employee stock purchase planchange of control offer pursuant to a provision similar to the requirements set forth in Section 4.08, or to exercise stock options received an asset sale offer pursuant to an employee a provision similar to the requirement set forth in Section 4.11, respectively; provided that prior to any such repurchase the Company has made the Change of Control Offer or director stock option plan or other incentive planthe Net Proceeds Offer, in a principal amount not to exceed as applicable, required by the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) terms of this clause (6)Indenture and repurchased all Notes validly tendered for repayment in connection with such Change of Control Offer or Net Proceeds Offer, as applicable; and (7) other Restricted Payments provided, however, that in an aggregate amount not to exceed $10,000,000; and The actions described in the case of each of clauses (12), (3), (4), (5), (6) and (68), no Default or Event of Default shall have occurred and be continuing or would arise therefrom. In determining the amount of Restricted Payments permissible under Section 4.09(a)(C), amounts expended pursuant to clauses (1) and (5) of this paragraph (bSection 4.09(b) shall be included as Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid and amounts expended pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (53), (4), (6), (7) and (7) 8) of this paragraph (bSection 4.09(b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) excluded. The amount of all any non-cash Restricted Payments (other than cash) will Payment shall be deemed to be equal to the Fair Market Value on thereof at the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodPayment.

Appears in 1 contract

Samples: Indenture (General Cable Corp /De/)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out of the proceeds of Permitted Refinancing Indebtedness; , or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, shall be the amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 4.09(a10.12(a) hereof; and hereof and (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the date of this Indenture shall not exceed the sum (without duplication) of the following: (A1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January October 1, 2004 1997 and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); , plus (B2) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; , plus (C3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; , plus (D4) the aggregate Net Cash Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; , plus (E5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the date of this Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of Investment), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1the date of this Indenture, 2004plus (6) $25,000,000. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3ii), (4), (5iii) and (7iv) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3ii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4iii) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7iv) other Restricted Payments repurchases, acquisitions or retirements of shares of Qualified Capital Stock of the Company deemed to occur upon the exercise of stock options or similar rights issued under employee benefit plans of the Company if such shares represent all or a portion of the exercise price or are surrendered in an aggregate amount not to exceed $10,000,000; and connection with satisfying any federal income tax obligation. The actions described in clauses (1i), (3ii), (4iii) and (6iv) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3C) of paragraph (a) (), provided that any dividend paid pursuant to clause (1i) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3C) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (ai). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.subsequent

Appears in 1 contract

Samples: Indenture (KCS Medallion Resources Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out of the proceeds of Permitted Refinancing Indebtedness; , or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, shall be the amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 4.09(a10.12(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 hereof and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.the

Appears in 1 contract

Samples: Indenture (Cliffs Drilling Co)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: : (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock on account of the Company Company's or any of its Restricted Subsidiary Subsidiaries' Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or Equity Interests (other rights to purchase Qualified Capital Stock than Disqualified Stock) of the Company); ; (2ii) purchase, redeem or otherwise acquire or retire for value (x) any Capital Stock Equity Interests of the Company or (y) any Affiliate thereof Equity Interests of any Restricted Subsidiary of the Company (other than Equity Interests owned by the Company or any Wholly Owned Restricted Subsidiary of the Company); (iii) or any optionsprepay, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out a scheduled repayment of the proceeds principal or a payment of Permitted Refinancing Indebtednessprincipal at stated maturity; or or (4iv) make any Restricted Investment; Investment (all such payments or and other actions described set forth in clauses (i) through (iv) above being collectively referred to as "RESTRICTED PAYMENTS") (provided, however, that no Permitted Investment shall be deemed to be a Restricted Payments”Payment), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing or would occur as a consequence of such Restricted Payment; (IIb) the Company could would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with the first paragraph of Section 4.09(a) 4.12 hereof; and (IIIc) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by the Company and its Restricted Subsidiaries after January 1the Issue Date (excluding Restricted Payments permitted by clauses (ii), 2004 shall not exceed the sum (without duplicationiii), (iv), (vi), (vii), (viii) and (ix) of the followingnext succeeding paragraph (d)), is less than the sum, without duplication, of: (Ai) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during for the period (taken as one accounting period) from the beginning on January 1, 2004 and ending on of the last day first fiscal quarter commencing after the Issue Date to the end of the Company’s last 's most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be for such period is a deficit or loss, minus less 100% of such deficit or loss); , plus (ii) 100% of (A) the aggregate net cash proceeds, (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 fair market value (as determined in good faith by the Company from evidenced by a resolution of the issuance or sale Board of Directors) of (x) marketable securities (other than marketable securities of the Company), (y) Capital Stock (other than Capital Stock of the Company) of a Person (other than an Affiliate of the Company) engaged primarily in the Oil and Gas Business; provided, that Person becomes a Restricted Subsidiary of the Company and (z) other assets used in the Oil and Gas Business, in the case of clauses (A) and (B), received by the Company after the Issue Date from the issue or sale of, or from additional capital contributions in respect of, Equity Interests of the Company (but excluding cash proceeds and marketable securities received from the sale of Equity Interests to any members of management or directors of the Company and its Restricted SubsidiariesSubsidiaries after the Issue Date to the extent such amounts have been applied to make Restricted Payments in accordance with clause (vi) of shares of Qualified Capital Stock the next succeeding paragraph) and (C) the amount by which Indebtedness of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of Restricted Subsidiary is reduced on the Company; plus (C) 's consolidated balance sheet upon the aggregate Net Cash Proceeds, conversion or exchange subsequent to the Fair Market Value Issue Date of Property other than cash, received after January 1, 2004 by any such Indebtedness into or for Equity Interests of the Company (other than from Disqualified Stock), together with the net proceeds, if any, received by the Company or any of its Restricted Subsidiaries) Subsidiaries upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; , plus (Eiii) to the extent not that any Restricted Investment that was made after the Issue Date is sold to an unaffiliated purchaser for cash or marketable securities or otherwise included liquidated or repaid for cash or marketable securities, the lesser of (A) the cash proceeds and/or the fair market value of such marketable securities (as determined in Consolidated Net Incomegood faith by the Company), as the case may be, and (B) the initial amount of the Restricted Investment, plus (iv) the amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments (A) payments of loans dividends or advances, interest or other transfers of assets, in each case assets to the Company or a any Restricted Subsidiary after January 1from Unrestricted Subsidiaries, 2004 from any Unrestricted Subsidiary or from (B) the redesignation of an Unrestricted Subsidiary Subsidiaries as a Restricted Subsidiary Subsidiaries or (valued in each case as provided in C) the definition receipt of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made proceeds by the Company and its or any Restricted Subsidiaries Subsidiary from the sale or other disposition of any portion of any Investment in such an Unrestricted Subsidiary after January 1Subsidiary, 2004plus (v) $10.0 million. (bd) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingThe foregoing provisions will not prohibit: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at said date of declaration such declaration date such declaration payment would have complied with the provisions of paragraph this Indenture; (aii) above the making of any Restricted Investment in exchange for, or out of the proceeds of, the substantially concurrent sale (and other than to a Subsidiary of the Company) of, or from substantially concurrent additional capital contributions in respect of, Equity Interests of the Company (other than Disqualified Stock) (provided, that the amount of any such payment cash proceeds that are utilized for any such Restricted Investment shall be deemed to have been paid on such date excluded from clause (c)(ii) of declaration for purposes of any calculation required by the provisions of paragraph (a) abovepreceding paragraph); (2iii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the defeasance, redemption, repurchase, redemption retirement or other acquisition or retirement of any shares Subordinated Indebtedness or of any class of Capital Stock Equity Interests of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a net cash proceeds from (x) an incurrence of Permitted Refinancing Indebtedness or (y) the substantially concurrent issue and sale (other than to a Restricted SubsidiarySubsidiary of the Company) of, or from substantially concurrent additional capital contributions (other than from a Subsidiary of the Company) in respect of, Equity Interests of the Company (other than Disqualified Stock) (provided, that the amount of any such net cash proceeds that are utilized for any such defeasance, redemption, repurchase, retirement or other acquisition shall be excluded from clause (c)(ii) of shares the preceding paragraph); (iv) any dividend or other distribution made by any Wholly Owned Subsidiary of Qualified Capital Stock the Company to another Wholly Owned Subsidiary of the Company or to the Company; (4v) the repurchase, redemption, repayment, defeasance redemption or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out Equity Interests of the aggregate Net Cash Proceeds fromCompany or any Restricted Subsidiary of the Company held by any future, a substantially concurrent issue and sale present or former employee or director (other than to a Restricted Subsidiaryor any of their respective heirs or estates or permitted transferees) of shares of Qualified Capital Stock the Company or any of the Company's Restricted Subsidiaries pursuant to any agreements (including employment agreements) or management equity plan or stock option plan or any other management or employee benefit plan or agreement (including, without limitation, any management equity subscription agreement, stock option agreement or similar written arrangement) approved by the Board of Directors; provided, that the aggregate Restricted Payments made under this clause (v) do not exceed in any calendar year $2.5 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $7.5 million in any calendar year); provided, further, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds received by the Company from the sale of Equity Interests of the Company to members of management or directors of the Company and its Restricted Subsidiaries that occurs after the Issue Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of the preceding paragraph (c)), plus (B) the cash proceeds of key man life insurance policies received by the Company and its Restricted Subsidiaries after the Issue Date, less (C) the amount of any Restricted Payments made pursuant to clauses (A) and (B) of this clause (v)); (5vi) repurchases, redemptions or other acquisitions or retirements for value of Equity Interests of the Company deemed to occur upon exercise or exchange of warrants, options or rights to acquire Equity Interests is such Equity Interests represent a portion of the exercise or exchange price of such warrants, options or rights, and any repurchases, redemptions or other acquisitions or retirements for value of Equity Interests made in lieu of withholding taxes in connection with any exercise or exchange of warrants, options or rights to acquire Equity Interests; (vii) payments to dissenting stockholders (x) pursuant to applicable law or (y) in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a consolidation, merger or transfer of assets in connection with a transaction that is not prohibited by this Indenture; (viii) cash payments in lieu of the issuance of fractional shares; and (ix) the purchaserepurchase, redemption, repayment, defeasance redemption or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness common Equity Interests of the Company so long as held by any Permitted Holder (aprovided, however, that (A) the principal aggregate amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid Restricted Payments made in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of reliance on this clause (6ix) shall not exceed $300.0 million and (B) after giving pro forma effect to any incurrence, assumption, guarantee, redemption or repayment of Indebtedness, or any issuance or redemption of Disqualified Stock, incurred or issued to finance all or a portion of such repurchase, redemption or other acquisition or retirement, the Company's Leverage Ratio would not have exceeded 1.75 to 1.0); and (7) other Restricted Payments provided, however, that in an aggregate amount not to exceed $10,000,000; and The actions the case of any transaction described in clauses (1ii), (3iii), (4v) and (6ix) and subclause (y) of clause (vii), in each case, of this paragraph (bd), no Default or Event of Default will have occurred and be continuing immediately after such transaction. (e) shall The Board of Directors may designate any Subsidiary to be an Unrestricted Subsidiary if the designation would not cause a Default. For purposes of making this determination, all outstanding Investments by the Company and its Restricted Subsidiaries, except to the extent repaid in cash, in the Subsidiary so designated will be deemed to be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall at the time of the designation and will reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall covenant. The designation will only be permitted to if such Restricted Payment would be taken in accordance with this paragraph permitted at such time and shall not reduce if such Subsidiary otherwise meets the amount that would otherwise be available for Restricted Payments under clause (3) definition of paragraph (a)an Unrestricted Subsidiary. (cf) The amount of all Restricted Payments (other than cash) will shall be the Fair Market Value fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) on the date of the Restricted Payment of the asset(s) or securities assets proposed to be transferred or issued by the Company or such the applicable Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above. Not later than the date of making any Restricted Payment, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers' Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in is permitted and setting forth the good faith determination of basis upon which the Company calculation required by this covenant were computed, which calculations may be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to based upon the Company’s 's latest available financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 1 contract

Samples: Indenture (Houston Exploration Co)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare Declare or pay any dividend (other than dividends payable solely in Capital Stock of the Borrower) on, or make any other distribution to holders payment or prepayment on account of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants set apart assets for a sinking or other rights to purchase Qualified Capital Stock of the Company); (2) purchaseanalogous fund for, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or defeasance, retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of of, any shares of any class of Capital Stock of the Company Borrower or any Restricted SubsidiarySubsidiary or any warrants or options to purchase any such Capital Stock, or make any payment of management or similar fees (including, without limitation, Management Fees, but excluding all expenses payable to Infinity, in exchange forits capacity as "Manager", or out under Section 1.6 of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale Management Agreement) to Infinity or any other Affiliate of the Borrower (other than to a any employee, officer or director of the Borrower or its Subsidiaries in connection with the performance of such employee's, officer's or director's duties in such capacity), whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Borrower or any Restricted SubsidiarySubsidiary (such declarations, payments, setting apart, purchases, redemptions, defeasances, retirements, acquisitions and distributions being herein called "Restricted Payments"), except that: (a) any Restricted Subsidiary may make Restricted Payments to the Borrower, (b) the Borrower may make Restricted Payments for the purpose of cashing out any fractional shares of Qualified Capital Stock following the payment of a dividend payable in Capital Stock of the Company;Borrower, (4i) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out Borrower may issue and deliver to INI Incentive Warrants pursuant to Section 2.3 of the aggregate Net Cash Proceeds from, a substantially concurrent issue Management Agreement and sale (other than to a Restricted Subsidiaryii) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) subject in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant each case to the terms of the Indebtedness refinanced Management Services Subordination Agreement and provided that, both prior to and after giving effect to each such payment, no Event of Default pursuant to Sections 7(a), (c) (solely in the case of an Event of Default pursuant to subsection 6.1, and, in such case, only if the Majority Lenders following such an Event of Default shall determine in their sole discretion to prohibit any payment provided for in clause (x) or (y) below) or (f) shall have occurred and be continuing, the amount Borrower may (x) make cash payments of any premium reasonably determined Management Fees to Infinity at the times and in the amounts provided for by the Company as necessary to accomplish such refinancing, plus the amount of expenses Section 2.1 of the Company incurred Management Agreement in connection with such refinancingrespect of each fiscal year and (y) make a cash payment of Management Fees to Infinity at the times and in the amounts provided for by Section 2.2 of the Management Agreement and (d) the Borrower and its Restricted Subsidiaries may make Restricted Payments in addition to those permitted in the foregoing clauses (a), (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not provided that, prior to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted after giving effect to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or each such Restricted SubsidiaryPayment, as the case may be, pursuant to the Restricted Paymentthere shall exist no Default or Event of Default hereunder. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Credit Agreement (Westwood One Inc /De/)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take indirectly (the payments and other actions described in the following actions:clauses being collectively “Restricted Payments”): (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary on its Equity Interests (other than dividends or distributions payable solely paid in shares of the Company’s Qualified Capital Stock of Equity Interests) held by Persons other than the Company or in options, warrants or other rights to purchase Qualified Capital Stock any of the Company)its Wholly Owned Restricted Subsidiaries; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (Restricted Subsidiary held by Persons other than the Company or any of its Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Subsidiaries; (3iii) make any principal payment on or repurchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value, prior to or make any scheduled principal payment, scheduled sinking fund payment on or maturitywith respect to, any Subordinated Indebtedness Debt except a payment of interest (excluding including (a) any intercompany Indebtedness between portion of interest that may be satisfied by deferring payment of such amount to a later date and (b) the cash payment at or among the Company and prior to maturity of any of its Restricted Subsidiariesamount previously deferred pursuant to clause (a), except in any case out of the proceeds of Permitted Refinancing Indebtedness) or principal at Stated Maturity; or (4iv) make any Restricted Investment other than a Permitted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)unless, unless at the time of of, and after giving effect to to, the proposed Restricted Payment: (I1) no Default or Event of Default shall have has occurred and be is continuing;, (II2) the Company could incur Incur at least $1.00 of additional Indebtedness Debt under the Fixed Charge Coverage Ratio test set forth in accordance with Section 4.09(a) hereof; 4.06(a), and (III3) the aggregate amount of expended for all Restricted Payments declared made on or made after January 1the Issue Date would not, 2004 shall not subject to paragraph (c), exceed the sum (without duplication) of the following:of (A) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company amount of the loss) accrued on a cumulative basis during the period period, taken as one accounting period, beginning on January 1, 2004 the first day of the first fiscal quarter of the Company for which a quarterly or annual report is provided pursuant to Section 4.17 after the Issue Date and ending on the last day of the Company’s last most recently completed fiscal quarter ending prior to the date of such proposed Restricted Payment (orfor which internal financial statements are available, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) subject to paragraph (c), the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiariesa Subsidiary) upon after the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing:Issue Date from (1) the payment issuance and sale of any dividend on any Capital Stock its Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted into Qualified Equity Interests of the Company within 60 days after the date of declaration thereofCompany, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);or (2) the payment of any dividend payable from as a Restricted Subsidiary contribution to its common equity, plus (C) an amount equal to the Company or any other Restricted Subsidiary sum, for all Unrestricted Subsidiaries, of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.following:

Appears in 1 contract

Samples: Indenture (Neenah Foundry Co)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock on account of the Company Company's or any Restricted Subsidiary Subsidiary's Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and dividends or in options, warrants or other rights distributions payable by a Restricted Subsidiary pro rata to purchase Qualified Capital Stock of the Company); its shareholders; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (of its Restricted Subsidiaries, other than any Wholly Owned such Equity Interests purchased from the Company or any Restricted Subsidiary for fair market value determined by the Board of the Company) or any options, warrants or other rights to acquire such Capital Stock Directors in good faith; (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out a payment of the proceeds of Permitted Refinancing Indebtednessinterest or principal at Stated Maturity; or or (4iv) make any Restricted Investment; Investment (all such payments or and other actions described set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments”)") if, unless at the time of and after giving effect to the proposed such Restricted Payment: (IA) no a Default or Event of Default shall have occurred and be continuing;continuing or shall occur as a consequence thereof; or (IIB) immediately after such Restricted Payment and after giving effect thereto on a Pro Forma Basis, the Company could incur shall not be able to issue $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a) hereof4.07(a); andor (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1the 1997 Notes Issue Date, 2004 shall not exceed without duplication, exceeds the sum of: (without duplication) of the following: (A1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1(including, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (orfor this purpose, if such Consolidated Net Income shall be a lossgains from Asset Sales and, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.Net

Appears in 1 contract

Samples: Indenture (Gfsi Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other payment or distribution to holders of, any shares of Capital Stock on account of the Company Company’s or any of its Restricted Subsidiary Subsidiaries’ Equity Interests or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company or in options, warrants payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary direct or indirect parent of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior value any Indebtedness that is subordinated to any scheduled principal payment, scheduled sinking fund payment the Notes or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Subsidiary Guarantees, except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing IndebtednessStated Maturity thereof; or (4) make any Restricted Investment; Investment (all such payments or and other actions described set forth in these clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (I) , no Default or Event of Default shall have has occurred and be continuing;is continuing or would occur as a consequence of such Restricted Payment and either: (II1) if the Company could incur $1.00 Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available at the time of additional Indebtedness in accordance such Restricted Payment is not less than 1.75 to 1.0, such Restricted Payment, together with Section 4.09(a) hereof; and (III) the aggregate amount of all other Restricted Payments declared or made after January 1by the Company and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), 2004 shall not exceed the sum (without duplication3), (4) and (5) of the followingnext succeeding paragraph) with respect to the quarter for which such Restricted Payment is made, is less than the sum, without duplication, is less than the sum, without duplication, of: (Aa) 50Available Cash from Operating Surplus with respect to the Company’s preceding fiscal quarter, plus (b) 100% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from (including the issuance fair market value of any Permitted Business or sale (other than long-term assets that are used or useful in a Permitted Business to any the extent acquired in consideration of its Restricted Subsidiaries) Equity Interests of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than Disqualified Stock)) after the date of this Indenture as a contribution to its common equity capital or from any the issue or sale of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock Equity Interests of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any Disqualified Stock) or from the issue or sale of its Restricted Subsidiaries) convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Indebtedness or shares of Disqualified Capital Stock the Company that have been converted into or exchanged for Qualified Capital such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (Ec) to the extent not that any Restricted Investment that was made after the date of this Indenture is sold for cash or otherwise included in Consolidated Net Incomeliquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus (d) the net reduction in Restricted Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, assets in each case to the Company or a any of its Restricted Subsidiary after January 1, 2004 Subsidiaries from any Person (including, without limitation, Unrestricted Subsidiary Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, to the redesignation extent such amounts have not been included in Available Cash from Operating Surplus for any period commending on or after the date of an Unrestricted Subsidiary the indenture (items (b), (c) and (d) being referred to as a Restricted Subsidiary (valued in each case as provided in the definition of InvestmentIncremental Funds”), not to exceed in minus (e) the case of any Unrestricted Subsidiary the total aggregate amount of Investments Incremental Funds previously expended pursuant to this clause (1) and clause (2) below; or (2) if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available at the time of such Restricted Payment is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other than Permitted Investments) in such Unrestricted Subsidiary Restricted Payments made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its excluding Restricted Subsidiaries may take the following actions so long as (in the case of Payments permitted by clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (65) of the next succeeding paragraph) with respect to the quarter for which such Restricted Payment is made (such Restricted Payments for purposes of this paragraph clause (2) meaning only distributions on limited partnership interests of the Company, plus the related distribution on the general partner interest and any distributions made with respect to incentive distribution rights), is less than the sum, without duplication, of: (a) $75 million less the aggregate amount of all Restricted Payments made by the Company and its Restricted Subsidiaries pursuant to this clause (2)(a) during the period ending on the last day of the fiscal quarter immediately preceding the date of such Restricted Payment and beginning on the date of this Indenture, plus (b) shall be Restricted Payments that shall be permitted Incremental Funds to be made in accordance with the extent not previously expended pursuant to this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (32) or clause (1) above. So long as no Default or Event of paragraph Default has occurred and is continuing or would be caused thereby (a) (provided that any dividend paid pursuant except with respect to clause (1) below under which the payment of a distribution or dividend is permitted), the preceding provisions will not prohibit: (1) the payment of any dividend or distribution within 60 days after the date of its declaration, if at the date of declaration the payment would have complied with the provisions of this paragraph Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent (a) contribution (other than from a Restricted Subsidiary of the Company) to the equity capital of the Company or (b) shall reduce sale (other than to a Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided, however, that the amount of any such net cash proceeds that would otherwise are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be available under clause excluded or deducted from the calculation of Available Cash from Operating Surplus and Incremental Funds; (3) the defeasance, redemption, repurchase, retirement or other acquisition of paragraph subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; (a4) when declared, but not also when subsequently paid pursuant the payment of any dividend or distribution by a Restricted Subsidiary of the Company to such clause (1)), and the actions described in clauses (2), holders of its Equity Interests on a pro rata basis; or (5) and (7) the repurchase, redemption or other acquisition or retirement for value of this paragraph (b) shall be permitted any Equity Interests of the Company or any Restricted Subsidiary of the Company pursuant to be taken any director or employee equity subscription agreement or equity option agreement or other employee benefit plan or to satisfy obligations under any Equity Interests appreciation rights or option plan or similar arrangement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) any calendar year. The amount of all Restricted Payments (other than cash) will be the Fair Market Value fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. . The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $5.0 million, by an officer of the Managing General Partner and, in the case of amounts over $5.0 million, by the Board of Directors of the Managing General Partner, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (dexcluding any Restricted Payment described in the preceding clause (2), (3), (4) In computing Consolidated Net Income under paragraph or (a5)) abovethe Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) – (5), the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall will be permitted to rely classify (or later classify or reclassify in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of whole or in part in its sole discretion) such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance any manner that complies with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 1 contract

Samples: Indenture (Inergy L P)

Limitation on Restricted Payments. (a) The Company Parent shall not, and shall not permit any Restricted Subsidiary toor, in the case of paragraphs (3) and (4) below, the Company to take, directly or indirectly, take any of the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary Parent (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire such shares of Qualified Capital Stock of the CompanyStock); (2) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Parent or any Capital Stock of any of its Affiliates (other than Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to the Stated Maturity of any scheduled principal payment or any sinking fund payment, scheduled sinking fund payment any Indebtedness of the Parent or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and any that is expressly subordinated in right of its Restricted Subsidiaries)payment to the Notes or to the Guarantees, except in any as the case out of the proceeds of Permitted Refinancing Indebtednessmay be; or (4) make any Restricted Investment (other than any Permitted Investment) in any Person; (such payments or other actions described in (but not excluded from) clauses (i1) through (iv4) above being are collectively referred to as "Restricted Payments"), ; unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors of the Parent, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company Parent could incur at least $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) pursuant to Section 4.09(a) hereof; and 1011 and (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the followingof: (Ai) 50100% of the Consolidated Net Income Operating Cash Flow of the Company accrued Parent less 1.5 times Consolidated Interest Expense of the Parent or (ii) if Consolidated Operating Cash Flow of the Parent is a negative, minus 100% of such negative amount, in each case on a cumulative basis during for the period beginning on January 1, 2004 the first day of the Parent's first fiscal quarter after the Issue Date and ending on the last day of the Company’s Parent's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)Payment; plus (Bii) the aggregate Net Cash Proceeds, or Proceeds and the Fair Market Value of Property other than cashTelecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company Parent after the Issue Date as capital contributions or from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of shares of Qualified Capital Stock of the Company or any Parent (including upon the exercise of options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (Crights) the aggregate Net Cash Proceedsor warrants, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants options or rights to purchase shares of Qualified Capital Stock of the CompanyParent; plus (Diii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company Parent after the Issue Date from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the CompanyParent, together with the aggregate cash Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Company Parent at the time of such conversion or exchange; plus (Eiv) to the extent not otherwise included in Consolidated Net IncomeOperating Cash Flow of the Parent, an amount equal to the sum of (a) the net reduction in Investments (other than Permitted Investments) in Unrestricted Subsidiaries any Person (other than a Restricted Subsidiary) resulting from the payment in cash of dividends, repayments of loans or advances, advances or other transfers of assets, in each case to the Company Parent or a any Restricted Subsidiary after January 1, 2004 the Issue Date from such Person and (b) the amount of any Unrestricted Subsidiary or net reduction in Investments resulting from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of "Investment”)") at the time of such redesignation; PROVIDED that, not to exceed in the case of any Unrestricted Subsidiary (a) or (b) above, the foregoing sum shall not exceed the total amount of Investments (other than Permitted Investments) previously made in such Person or Unrestricted Subsidiary made by the Company Parent and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Subsidiaries. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Supplemental Indenture (Pathnet Telecommunications Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, on any shares of the Company's Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire shares of such Qualified Capital Stock of the CompanyStock); (2ii) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, the Company's Capital Stock or any Capital Stock of any Affiliate of the Company or any Affiliate thereof (other than Capital Stock of any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on on, or repurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Indebtedness; (excluding iv) declare or pay any intercompany Indebtedness between dividend or among distribution on any Capital Stock of any Subsidiary to any Person (other than (a) to the Company and or any of its Restricted SubsidiariesWholly 91 Owned Subsidiaries or (b) to all holders of Capital Stock of such Subsidiary on a pro rata basis), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4v) make any Restricted Investment; Investment in any Person (such payments or other than any Permitted Investments) (any of the foregoing actions described in clauses (i) through (iv) above being collectively referred to v), other than any such action that is a Permitted Payment (as defined below), collectively, "Restricted Payments") (the amount of any such Restricted Payment, if other than cash, as determined by the board of directors of the Company, whose determination shall be conclusive and evidenced by a board resolution), unless at the time of (1) immediately before and immediately after giving effect to the such proposed Restricted Payment: (I) Payment on a pro forma basis, no Default or Event of Default shall have occurred and be continuing; ; (II2) immediately before and immediately after giving effect to such Restricted Payment on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under the provisions described in accordance with Section 4.09(a1008(a); and (3) hereof; and (III) after giving effect to the proposed Restricted Payment, the aggregate amount of all such Restricted Payments declared or made after January 1the date of the date hereof, 2004 shall does not exceed the sum (without duplication) of the following:following (the "Basket"): (Ai) 50the Cumulative Operating Cash Flow determined at the time of such Restricted Payment less (ii) 150% of cumulative Consolidated Interest Expense determined for the Consolidated Net Income period (treated as one accounting period) commencing on the date of the Company accrued on a cumulative basis during original issue of the period beginning on January 1, 2004 Securities and ending on the last day of the Company’s last most recent fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall for which consolidated financial information of the Company is required to be a loss, minus 100% of such loss); plusavailable; (B) (i) capital contributions to the Company after the date of this Indenture or (ii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plusCompany (except, in each case, to the extent such proceeds are used to purchase, redeem or otherwise retire Capital Stock or Subordinated Indebtedness as set forth below in clause (ii) or (iii) of paragraph (b) below); (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus; (D) the aggregate Net Cash Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance conversion or sale (other than to any exchange, if any, of its Restricted Subsidiaries) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted of the Company or its Subsidiaries into or exchanged for Qualified Capital Stock of the CompanyCompany plus, together with to the extent such debt securities or Redeemable Capital Stock were issued after the date of this Indenture, the aggregate cash received by the Company at the time of such conversion or exchangeNet Cash Proceeds from their original issuance; plusand (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of the disposition or repayment of any Unrestricted Subsidiary Investment constituting a Restricted Payment, an amount equal to the total return of capital with respect to such Investment and the initial amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Investment. (b) Notwithstanding paragraph (a) abovethe foregoing, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), ii) through (4), (5) and (7vi) below) , so long as there is no Default or Event of Default continuing, the foregoing provisions shall have occurred and be continuing:not prohibit the following actions (each of clauses (i) through (vi) being referred to as a "Permitted Payment"): (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied with payment was permitted by the provisions of paragraph (a) above (of this Section and such payment shall be have been deemed to have been paid on such date of declaration and shall not have been deemed a Permitted Payment for purposes of any the calculation required by the provisions of paragraph (a) above)of this Section 1009; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3ii) the repurchase, redemption redemption, or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company in exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of, other shares of Qualified Capital Stock of the Company; provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (3)(B) of paragraph (a) of this Section 1009; (iii) the repurchase, redemption, defeasance, retirement or acquisition for value or payment of principal of any Restricted Subsidiary, Subordinated Indebtedness or Redeemable Capital Stock in exchange for, or out in an amount not in excess of the aggregate Net Cash Proceeds of, a substantially concurrent issue issuance and sale for cash (other than to a Restricted Subsidiaryany Subsidiary of the Company) of shares of any Qualified Capital Stock of the Company, provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (3)(B) of paragraph (a) of this Section 1009; (4iv) the repurchase, redemption, repaymentdefeasance, defeasance or other retirement, refinancing, acquisition or retirement for value or payment of principal of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Redeemable Capital Stock) in exchange for, or out of (a "refinancing") through the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) issuance of new Subordinated Indebtedness of the Company so long as Company, provided that any such new Subordinated Indebtedness (a1) the shall be in a principal amount of such new Indebtedness that does not exceed the principal amount so refinanced (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, then such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired), plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (II) the 93 amount of any premium reasonably determined by or other payment actually paid at such time to refinance the Company as necessary to accomplish such refinancingIndebtedness, plus plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing, ; (b2) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer greater than the remaining Average Life to Stated Maturity of the Notes and such new Indebtedness Securities; (3) has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesSecurities; and (4) is expressly subordinated in right of payment to the Securities at least to the same extent as the Subordinated Indebtedness to be refinanced; (6v) loans made the repurchase, redemption, defeasance, retirement, refinancing, acquisition for value or payment of any Redeemable Capital Stock through the substantially concurrent issuance of new Redeemable Capital Stock of the Company, provided that any such new Redeemable Capital Stock (1) shall have an aggregate liquidation preference that does not exceed the aggregate liquidation preference of the amount so refinanced; (2) has an Average Life to officersStated Maturity greater than the remaining Average Life to Stated Maturity of the Securities; and (3) has a Stated Maturity later than the Stated Maturity for the final scheduled principal payment of the Securities; and (vi) the repurchase of shares of, directors or employees options to purchase shares of, common stock of the Company or any Restricted Subsidiary of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the Company in an aggregate amount of such repurchases in any calendar year shall not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed 1 million and $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would 5 million in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodaggregate.

Appears in 1 contract

Samples: Indenture (Concentric Network Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)Payment, unless at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing or occur as a consequence thereof; (IIb) the Company could incur at least $1.00 of additional Indebtedness in accordance with pursuant to clause (e) of Section 4.09(a) 4.11 hereof; and (IIIc) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Issue Date through and including the date of such Restricted Payment does not exceed the sum (without duplication) of the following: (A) 50% of the Company's Consolidated Net Income of (or in the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if event such Consolidated Net Income shall be a lossdeficit, minus 100% of such loss); plus deficit) from and including April 1, 1998 to and including the last day of the fiscal quarter immediately preceding the date of such Restricted Payment. The provisions of this Section 4.12 shall not prohibit (Bi) the aggregate Net Cash Proceedspayment of any dividend within sixty (60) days after the date of declaration thereof, or if such payment would comply with the Fair Market Value provisions of Property other than cashthis Indenture at the date of the declaration of such payment, received after January 1, 2004 by (ii) the Company from the issuance or sale (other than to retirement of any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any optionsIndebtedness of the Company which is subordinated in right of payment to the Securities by conversion into, warrants or rights to purchase such by an exchange for, shares of Qualified Capital Stock of the Company that are not Disqualified Stock or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company; plus ) of other shares of Capital Stock (Cother than Disqualified Stock) of the Company, and (iii) the aggregate Net Cash Proceedsredemption or retirement of Indebtedness of the Company which is subordinated in right of payment to the Securities in exchange for, by conversion into, or out of the Fair Market Value Net Proceeds of, a substantially concurrent sale of Property other than cash, received after January 1, 2004 by subordinated Indebtedness of the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock a Subsidiary of the Company; plus ) that is contractually subordinated in right of payment to the Securities at least to the same extent that the Indebtedness being redeemed or retired is subordinated to the Securities. In determining the amount of Restricted Payments permissible under clause (Dc) above, amounts expended pursuant to clauses (i) and (ii) above shall be included as Restricted Payments. Not later than the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale date of making any Restricted Payment (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with dividend payments on the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”Mezzanine Preferred Stock), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and its Restricted Subsidiaries setting forth the basis upon which the calculations required by this Section 4.12 were computed, which calculations may take be based upon the following actions so Company's latest available financial statements. So long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration , or occur as a consequence thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment this Section 4.12 shall be deemed to have been paid on such date of not prohibit the declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value dividends payable on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, Mezzanine Preferred Sock as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would set forth in the good faith determination Certificate of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodDesignations.

Appears in 1 contract

Samples: Indenture (Headway Corporate Resources Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take any of the following actions:actions (each, a “Restricted Payment”): (1i) declare or pay any dividend on, or return of capital or make any other distribution to holders of, any on or in respect of shares of Capital Stock of the Company or any Restricted Subsidiary to holders of such Capital Stock, other than: (other than 1) dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company; (2) dividends or distributions payable to the Company and/or a Restricted Subsidiary; or (3) dividends, distributions or returns of capital made on a pro rata basis to the Company and its Restricted Subsidiaries, on the one hand, and minority holders of Capital Stock of a Restricted Subsidiary, on the other hand (or on a less than pro rata basis to any minority holder); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (held by Persons other than the purchase, redemption, acquisition Company or retirement any of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)its Restricted Subsidiaries; (3iii) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, as the case may be, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless if at the time of the Restricted Payment and immediately after giving pro forma effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the followingthereto: (A) a Default or an Event of Default has occurred and is continuing; (B) the Company is not able to Incur at least U.S.$1.00 of additional Indebtedness pursuant to Section 3.8(a); or (C) the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of the proposed Restricted Payment and all other Restricted Payments made subsequent to the Issue Date up to the date thereof will exceed the sum of: (1) 50% of the cumulative Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such cumulative Consolidated Net Income shall be of the Company is a loss, minus 100% of such the loss), accrued during the period, treated as one accounting period, from June 30, 2009 to the end of the most recent fiscal quarter for which consolidated financial information of the Company is available; plus (B2) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from any Person from any: (i) contribution to the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company not representing an interest in Disqualified Capital Stock or any options, warrants or rights to purchase such shares issuance and sale of Qualified Capital Stock of the Company, in each case subsequent to the Issue Date; plusor (Cii) issuance and sale subsequent to the aggregate Net Cash ProceedsIssue Date (and, or in the Fair Market Value case of Property other than cashIndebtedness of a Restricted Subsidiary, received after January 1, 2004 by at such time as it was a Restricted Subsidiary) of any Indebtedness for borrowed money of the Company (other than from or any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock Subsidiary that have has been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assetsexcluding, in each case to the Company or a Restricted Subsidiary after January 1case, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.proceeds:

Appears in 1 contract

Samples: Indenture (Arcos Dorados Holdings Inc.)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actionsmake any Restricted Payment if immediately after giving effect to that Restricted Payment: (b) The provisions of Section 4.09 (a) shall not prohibit: (1) declare or pay the payment of any dividend onor the making of any distribution within 60 days after the date of its declaration if the dividend or distribution would have been permitted on the date it is declared; (2) any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or make any other distribution to holders ofmade by exchange for, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights a substantially concurrent cash capital contribution received by the Company from its shareholders with respect to purchase its Qualified Capital Stock Stock; provided that such Net Cash Proceeds shall be excluded from the calculation in Section 4.09(a)(3); (3) repurchases of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) warrants, options or any options, warrants or other rights to acquire Capital Stock deemed to occur upon exercise of warrants, options or rights to acquire Capital Stock if such Capital Stock (other than the purchaseStock, redemptionwarrants, acquisition options or retirement of any Disqualified Capital Stock rights represent a portion of the Company solely exercise price of such warrants, options or rights or nominal cash payments in shares lieu of Qualified Capital Stock issuances of the Company); fractional shares; (34) make any principal payment on or repurchasepayments made to purchase, redeem, defease or otherwise acquire or retire for valuevalue any Subordinated Debt of the Company pursuant to provisions requiring the Company to offer to purchase, prior redeem, defease or otherwise acquire or retire for value such Subordinated Debt, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Debt, plus any accrued and unpaid interest thereon, pursuant to provisions similar to those in Section 4.07; provided, however, that the Company shall have previously made a Change of Control Offer in connection with such change of control transaction and have purchased all Notes tendered in connection with that Change of Control Offer before the making of such Restricted Payment to the extent required under this Indenture; (5) the declaration and payment of dividends by the Company or any scheduled principal paymentRestricted Subsidiary to, scheduled sinking fund payment or maturitythe making of loans to, any Subordinated Indebtedness direct or indirect parent entity of the Company in amounts required for such parent entity to pay: (excluding any intercompany Indebtedness between A) franchise and excise taxes and other fees, taxes and expenses required to maintain its corporate existence, (B) foreign, federal, state and local income and similar taxes, to the extent such income taxes are attributable to the income, revenue, receipts, capital 65 #94897038v7 or among margin of the Company and the Restricted Subsidiaries and, to the extent of the amount actually received from its Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries; provided that in each case the amount of such payments in any of fiscal year does not exceed the amount that the Company and its Restricted Subsidiaries)Subsidiaries would be required to pay in respect of foreign, except in federal, state and local taxes for such fiscal year were the Company, its Restricted and its Unrestricted Subsidiaries (to the extent described above) to pay such taxes separately from any case out such direct or indirect parent entity of the proceeds Company, (C) customary salary, bonus and other benefits payable to officers, employees and directors of Permitted Refinancing Indebtedness; or any direct or indirect parent entity of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operation of the Company and the Restricted Subsidiaries, including the Company’s proportionate share of such amount relating to such parent entity being a public company, (4D) make any Restricted Investment; general corporate operating (such payments including, without limitation, expenses related to auditing or other actions described in clauses accounting matters) and overhead costs and expenses of any direct or indirect parent entity of the Company to the extent such costs and expenses are attributable to the ownership or operation of the Company and the Restricted Subsidiaries, including the Company’s proportionate share of such amount relating to such parent entity being a public company, (E) amounts required for any direct or indirect parent entity of the Company to pay fees and expenses incurred by any direct or indirect parent entity of the Company related to (i) through the maintenance by such parent entity of its corporate or other entity existence and (ivii) above being collectively referred any unsuccessful equity or debt offering of such parent entity of the Company, (F) taxes with respect to as “Restricted Payments”), unless at income of any direct or indirect parent entity of the time of and after giving effect Company derived from funding made available to the proposed Company and its Restricted Payment: Subsidiaries by such direct or indirect parent entity and (IG) no Default cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or Event other securities convertible into or exchangeable for Equity Interests of Default shall have occurred and be continuing; (II) the Company could incur $1.00 or any such direct or indirect parent entity of additional Indebtedness the Company; (6) Restricted Payments made after the Issue Date in accordance with Section 4.09(a) hereof; and (III) the an aggregate amount of which, when taken together with all Restricted Payments declared or made after January 1pursuant to this clause (6), 2004 shall does not exceed the sum greater of (without duplicationi) of the following: $750.0 million and (Aii) 5085.0% of the Consolidated Net Income EBITDA of the Company accrued on a cumulative basis during and its Restricted Subsidiaries for the period beginning on January 1, 2004 and ending on the last day of the Company’s last most recent four consecutive fiscal quarter quarters ending prior to the date of such proposed determination for which internal financial statements are available (calculated on a pro forma basis); plus the amount calculated pursuant to Section 4.09(a)(3)(d) with respect to any Investments 66 #94897038v7 made (or deemed made with respect to an Unrestricted Subsidiary) pursuant to this clause (6); (7) any Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as the Leverage Ratio is less than 4.00 to 1.00 after giving pro forma effect to such Restricted Payment; (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) 8) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereofdividends, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed distributions or other amounts to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) fund the repurchase, redemption or other acquisition or retirement for value of any shares of the Company’s or its direct or indirect parent’s Equity Interests or any Equity Interests of any class of its Restricted Subsidiaries held by any then-existing or former director, officer, employee, independent contractor or consultant of the Company, its direct or indirect parent or any of its Restricted Subsidiaries or their respective assigns, estates or heirs; provided, however, that the price paid for all repurchased, redeemed, acquired or retired Equity Interests in all cases, other than as a result of death or disability, does not exceed $25.0 million in the aggregate in any fiscal year (with unused amounts in any fiscal year being carried over to succeeding fiscal years, subject to a maximum (without giving effect to the following proviso) of $50.0 million in any fiscal year); provided, further, that the amounts in any fiscal year may be increased by an amount not to exceed: (A) the cash proceeds received by the Company from the sale of Qualified Capital Stock of the Company to any present or former employees, directors, officers or consultants (or their respective permitted transferees) of the Company or any of its Restricted Subsidiaries following the Issue Date, to the extent that such cash proceeds have not otherwise been applied to the payment of Restricted Payments by virtue of Section 4.09(a)(3) or Section 4.09(b)(2); provided that such amounts as have been applied to the payment of Restricted Payments in accordance with this clause (8) shall be excluded from the calculation of the amount of Restricted Payments permitted pursuant to Section 4.09(a)(3)(b) and Section 4.09(b)(2); plus (B) the cash proceeds of “key man” life insurance policies received by the Company or any of its Restricted Subsidiaries since the Issue Date; less (C) the amount of any Restricted Payments previously made with the cash proceeds described in subclause (A) or (I) of this clause (8); and provided, further, that cancellation of Debt owing to the Company from any present or former employees, directors, officers or consultants (or their respective permitted transferees) of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company shall not be deemed to constitute a Restricted Payment for purposes of this Section 4.09; (9) the redemption, repurchase or any Restricted Subsidiary, in other acquisition or retirement of (i) Subordinated Debt made by exchange for, or out of the aggregate Net Cash Proceeds proceeds of the substantially concurrent sale of, a substantially concurrent issue Subordinated Debt constituting Refinancing Debt and sale (other than to a Restricted Subsidiaryii) of shares of Qualified Disqualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in made by exchange for, or out of the aggregate Net Cash Proceeds from, a proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified of, Disqualified Capital Stock of the Companyconstituting Refinancing Debt; (5c) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of In calculating the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant Restricted Payments made subsequent to the terms Issue Date for purposes of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid Section 4.09(a), amounts expended pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5Section 4.09(b)(1) and (7) of this paragraph (b14) shall be permitted to included in such calculation, and all others shall be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)excluded. (cd) The amount of all Restricted Payments (other than cash) will shall be the Fair Market Value on the date of the such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company or such Restricted SubsidiarySubsidiary of the Company, as the case may be, pursuant to the such Restricted Payment. The Fair Market Value of any non-cash Restricted Payment shall be determined in good faith by the Company; provided that, if the Fair Market Value of such non-cash Restricted Payment is greater than $100.0 million, such value shall be determined conclusively by the Board of Directors of the Company acting in good faith. (de) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company or any of its Restricted Subsidiaries makes a Restricted Payment whichthat, at the time of the making of such Restricted Payment Payment, would in the good faith determination of the Company be permitted under the requirements of this IndentureSection 4.09, such Restricted Payment shall will be deemed to have been made in compliance with this Indenture Section 4.09 notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income the amount available for Restricted Payments. For purposes of determining compliance with this covenant, (i) in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of items (1) through (19) of Section 4.09(b) or is entitled to be made pursuant to Section 4.09(a), the Company or any of its Restricted Subsidiaries may allocate all or any portion of such Restricted Payment among the categories described in clauses (1) through (19) of Section 4.09(b) or among such categories and the types described in Section 4.09(a); provided that, at the time of such allocation, all such Restricted Payments, or allocated portions thereof, would be permitted under the various provisions of the covenant described in Section 4.09 and (ii) any Restricted Payment (or a portion thereof) originally made pursuant to clauses (1) through (19) of Section 4.09(b) or pursuant to the first paragraph of this covenant may later be reclassified by the Company for any periodsuch that it will be deemed as having been made pursuant to Section 4.09(a) or clauses (1) through (19) of Section 4.09(b), as applicable, to the extent that such reclassified Restricted Payment could be made pursuant to such Section or item at the time of such reclassification.

Appears in 1 contract

Samples: Indenture (Pilgrims Pride Corp)

Limitation on Restricted Payments. (a) The 4.12.1 Section 4.12.2 below permits the Company to declare and pay dividends in specified circumstances. Except as provided in Section 4.12.2 below, the Company shall not, and shall not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectly, take the following actions: (1a) declare or pay any dividend on, dividends or make any other payment or distribution to holders ofon account of the Company’s or any of its Subsidiaries’ Equity Interests (including, without limitation, any shares of Capital Stock of payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary of its Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company and other than dividends or in options, warrants distributions payable to the Company or other rights to purchase Qualified Capital Stock a Restricted Subsidiary of the Company); (2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock of merger or consolidation involving the Company or Company) any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary Equity Interests of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3c) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior value any Indebtedness of the Company or any Subsidiary that is contractually subordinated to the Notes or to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Note Guarantee (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest or principal at the proceeds of Permitted Refinancing Indebtedness; Stated Maturity thereof, or (4d) make any Restricted Investment; (all such payments or and other actions described set forth in clauses (iSections 4.12.1(a) through (ivd) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment:. (I) 4.12.2 So long as no Default or Event of Default shall have has occurred and is continuing or would be continuing; (II) caused thereby, the provisions of Section 4.12.1 will not prohibit the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared from declaring or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued paying dividends if on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of each such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, declaration or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingpayment: (1) the payment Company and the Subsidiary Guarantors, as a group, maintained a Fixed Charge Coverage Ratio in excess of any dividend on any Capital Stock of 10:1 for the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph then most recently completed four (a4) above (and such payment shall be deemed to quarter period for which financial statements have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)prepared in accordance with this Indenture; (2) the payment Company and the Subsidiary Guarantors, as a group, maintained a total Indebtedness to Consolidated EBITDA ratio of any dividend payable from a Restricted Subsidiary to 1:1 for the Company or any other Restricted Subsidiary of the Company;then most recently completed four (4) quarter period for which financial statements have been prepared in accordance with this Indenture; and (3) the repurchaseall Restricted Payments, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiarytaken as a whole, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale do not exceed five percent (other than to a Restricted Subsidiary5%) of shares of Qualified Capital Stock of Consolidated Net Income for the Company; then most recently completed four (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement quarter period for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made financial statements have been prepared in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Indenture. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (PT Centralpertiwi Bahari)

Limitation on Restricted Payments. (a) The the Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take indirectly (the payments and other actions described in the following actions:clauses of this Section 4.06(a) being collectively called “Restricted Payments”): (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary on its Equity Interests (other than dividends or distributions payable solely paid in shares of the Company’s Qualified Capital Stock of Equity Interests) held by Persons other than the Company or in options, warrants or other rights to purchase Qualified Capital Stock any of the Company)its Restricted Subsidiaries; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (held by Persons other than the purchase, redemption, acquisition Company or retirement any of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)its Restricted Subsidiaries; (3iii) make any principal payment on or repurchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value, prior or make any payment on or with respect to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Debt (excluding any intercompany Indebtedness between or other than among the Company and any of its Restricted Subsidiaries or any Restricted Subsidiary and any other Restricted Subsidiaries), ) except in any case out payments of the proceeds of Permitted Refinancing Indebtednessinterest and principal at Stated Maturity; or (4iv) make any Restricted Investment other than a Permitted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)unless, unless at the time of of, and after giving effect to to, the proposed Restricted Payment: (I1) no Default or Event of Default shall have has occurred and be continuing;is continuing or would occur as a consequence of such Restricted Payment, (II2) the Company at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable period could incur Incur at least $1.00 of additional Indebtedness in accordance with Debt under Section 4.09(a) hereof; 4.05(a), and (III3) the aggregate amount of expended by the Company and its Restricted Subsidiaries for all Restricted Payments declared or made after January 1March 26, 2004 shall not would not, subject to paragraph (c), exceed the sum (without duplication) of the followingof: (A) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company amount of the loss) accrued on a cumulative basis during the period period, taken as one accounting period, beginning on January 1, 2004 the first day of the fiscal quarter in which the Issue Date occurs and ending on the last day of the Company’s last most recently completed fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)for which internal financial statements are available; plus (B) subject to paragraph (c), the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any a Subsidiary) after the Issue Date: (i) from the issuance and sale of its Restricted Subsidiaries) upon Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the exercise of any options, warrants or rights to purchase shares of extent since converted into Qualified Capital Stock Equity Interests of the CompanyCompany (but excluding any Qualified Equity Interests to the extent issued in or in connection with the proposed exchange offer or offering described in the Form S-4), or (ii) as a contribution to its common equity; plus (DC) an amount equal to the aggregate Net Cash Proceeds received after January 1sum, 2004 by the Company from the issuance or sale (other than to any of its Restricted for all Unrestricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock , of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingfollowing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Foster Wheeler Inc)

AutoNDA by SimpleDocs

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)Payment if, unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no any Default or Event of Default shall would have occurred and be continuing; (IIb) the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with pursuant to clause (a) of Section 4.09(a) hereof4.11; andor (IIIc) the aggregate amount of expended or declared for all Restricted Payments declared or made after January 1, 2004 shall not from the Issue Date would exceed the sum of (without duplication) of the following:): (A1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning (treated as one accounting period) commencing on January 1, 2004 the Reference Date and ending on the last day of the Company’s last fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment (or, if such aggregate Consolidated Net Income shall be a loss, minus 100% of such loss); plus, (B2) the aggregate Net Cash Proceedsnet cash proceeds, or the Fair Market Value of Property other than cash (provided that, in the case of Property that is Capital Stock, such Capital Stock falls within the meaning of clause (b) of the definition of “Additional Assets”), received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) by the Company of its Capital Stock (other than Disqualified Stock) after the Reference Date, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof, (3) the aggregate net cash proceeds, or the Fair Market Value of Property other than cash, received by the Company as capital contributions to the Company (other than from a Subsidiary of the Company) on or after January 1, 2004 the Issue Date, (4) the aggregate net cash proceeds received by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock Subsidiary of the Company or any options, warrants an employee stock ownership plan or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 trust established by the Company (other than from or any such Subsidiary for the benefit of its Restricted Subsidiariestheir employees) upon on or after the exercise Issue Date of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of convertible Indebtedness or shares of Disqualified Capital Stock that have has been converted into or exchanged for Qualified Capital Stock (other than Disqualified Stock) of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plusexchange or received by the Company from any conversion or exchange of convertible Indebtedness issued or sold (other than to any Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) prior to the Issue Date, excluding: (EA) any such Indebtedness issued or sold to the Company or a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees, and (B) the aggregate amount of any cash or other Property distributed by the Company or any Restricted Subsidiary upon any such conversion or exchange, (5) to the extent not otherwise included in the Company’s Consolidated Net Income, an amount equal to the net reduction in Investments made by the Company and its Restricted Subsidiaries subsequent to the Issue Date in Unrestricted Subsidiaries any Person resulting from from: (A) payments of interest on debt, dividends, repayments of loans or advances, advances or other transfers or distributions of assetsProperty, in each case to the Company or any Restricted Subsidiary from any Person other than the Company or a Restricted Subsidiary after January 1Subsidiary, 2004 from and in an amount not to exceed the book value of such Investments previously made in such Person that were treated as Restricted Payments, or (B) the designation of any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued Subsidiary, and in each case as provided in the definition of “Investment”), an amount not to exceed in the case lesser of: (i) the book value of any Unrestricted Subsidiary the total amount of all Investments (other than Permitted Investments) previously made in such Unrestricted Subsidiary made by that were treated as Restricted Payments, and (ii) the Company Fair Market Value of the Company’s and its Restricted Subsidiaries Subsidiaries’ interest in such Unrestricted Subsidiary after January 1Subsidiary, 2004.and (b6) Notwithstanding $30.0 million. The limitations set forth in the preceding paragraph (a) above, will not prevent the Company and its or any Restricted Subsidiaries may take Subsidiary from making the following actions Restricted Payments so long as (in as, at the case of clauses (3)time thereof, (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1a) the payment of any dividend on any Capital Stock of the Company or any Restricted Subsidiary within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to dividend could have been paid on such date of declaration for purposes of any calculation required by in compliance with the provisions of paragraph (a) above)preceding paragraph; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3b) the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any of its Subsidiaries pursuant to the terms of agreements (including employment agreements) or plans (including employee stock ownership plans but excluding other plans to purchase such Capital Stock in open market transactions, together with, in the case of employee stock ownership plans, loans to or Investments therein in an amount sufficient to fund such repurchase, redemption or other acquisition or retirement by such plan) approved by the Company’s Board of Directors, including any such repurchase, redemption, acquisition or retirement of shares of such Capital Stock that is deemed to occur upon the exercise of stock options or vesting of restricted stock grants or similar rights if such shares represent all or a portion of the exercise price or are netted out or surrendered in connection with satisfying Federal income tax obligations; provided, however, that the aggregate amount of such repurchase, redemptions, acquisitions and retirements (but disregarding any class transaction that does not result in the payment of cash by the Company or any Restricted Subsidiary to or on behalf of another Person) shall not exceed the sum of: (1) $7.5 million in any twelve-month period, and (2) the aggregate net proceeds, if any, received by the Company during such twelve-month period from any issuance of such Capital Stock pursuant to such agreements or plans; (c) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of, a substantially concurrent issue issuance and sale (other than to a Restricted SubsidiarySubsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries, for the benefit of their employees) of shares of Qualified Capital Stock of the CompanyCompany (other than Disqualified Stock); (4d) the purchase, redemption, legal defeasance, acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees); (e) the making of any principal payment on or the repurchase, redemption, repayment, legal defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, net proceeds of a substantially concurrent issue and sale Incurrence (other than a sale to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; ) of (5i) the purchase, redemption, repayment, defeasance or any other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated Permitted Refinancing Indebtedness or (ii) with respect only to the Notes Company’s 9⅜% senior subordinated notes due 2012, Senior Indebtedness, so long as at the time of and after giving effect to such Incurrence, the Company could Incur at least $1.00 of Indebtedness pursuant to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and clause (ca) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment Section 4.11 of the Notes;this Indenture. (6f) loans loans, in an aggregate principal amount at any one time outstanding of not more than $2.0 million, made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors (or by a duly authorized officer) and in compliance with the Xxxxxxxx-Xxxxx Act of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time2002, the net cash proceeds of which are used solely solely: (a1) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the purchase price of such common stock or the exercise price of such stock options, or or (b2) to refinance loans, together with accrued interest thereon, made pursuant to item (a1) of this clause (6f); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and . The actions described in clauses (1), (3), (4a) and (6b) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made included in accordance with this paragraph (b) but shall reduce the calculation of the amount that would otherwise be available for of Restricted Payments under clause Payments. The actions described in clauses (3c), (d), (e) of paragraph and (a) (provided that any dividend paid pursuant to clause (1f) of this paragraph (b) shall reduce be excluded in the calculation of the amount of Restricted Payments, provided that would otherwise be available under clause (3) the net cash proceeds from any issuance or sale of paragraph (a) when declared, but not also when subsequently paid Capital Stock or Indebtedness of the Company pursuant to such clause (1)c), and the actions described in clauses (d) or (e) shall be excluded from any calculations pursuant to clause (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph or (a). (c4) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodimmediately preceding paragraph.

Appears in 1 contract

Samples: First Supplemental Indenture (Swift Energy Co)

Limitation on Restricted Payments. (a) The Company shall notnot make, and shall not permit any Restricted Subsidiary toto make, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless Payment if at the time of of, and after giving effect to the to, such proposed Restricted Payment: (I1) no a Default or Event of Default shall have occurred and be continuing; (II2) the Company could not incur at least $1.00 of additional Indebtedness in accordance with Debt pursuant to clause (1) of Section 4.09(a) hereof4.06(a); andor (III3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made after January 1since the Issue Date (the amount of any Restricted Payment, 2004 shall not if made other than in cash, to be based upon Fair Market Value) would exceed the sum (without duplication) of the following:of (A) 50100% of the Company's Cumulative Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of EBITDA minus 1.4 times the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or's Cumulative Consolidated Interest Expense, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) 100% of the aggregate Net Cash Proceedsnet proceeds (after deduction of fees, or expenses, discounts and commissions incurred in connection with issuance and sale) and the Fair Market Value of securities or other Property other than cash, received after January 1, 2004 by the Company from the issuance issue or sale sale, after the Issue Date, of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company issued to any Restricted Subsidiary of the Company; ) of the Company or any Debt or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which have been so converted or exercised or exchanged, as the case may be, plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004$10.0 million. (b) Notwithstanding paragraph (a) abovethe foregoing limitation, the Company and may: (1) pay dividends on its Restricted Subsidiaries may take Capital Stock within 60 days of the following actions so long as (declaration thereof if, on said declaration date, such dividends could have been paid in compliance with this Indenture; PROVIDED, HOWEVER, that such dividend shall be included in the case calculation of clauses the amount of Restricted Payments; (2) purchase, repurchase, redeem, legally defease, acquire or retire for value (x) Capital Stock of the Company or Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Capital Stock and other than Capital Stock issued or sold to a Subsidiary of the Company), and (y) Disqualified Capital Stock of the Company in exchange for, or out of the proceeds of the substantially concurrent sale of (other than to a Subsidiary of the Company) Disqualified Capital Stock of the Company that has a redemption date, and requires the payment of current dividends in cash, no earlier than the Disqualified Capital Stock being purchased, redeemed or otherwise acquired or retired; PROVIDED, HOWEVER, that (A) such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments and (B) the Capital Stock Sale Proceeds from such exchange or sale shall be excluded from the calculation pursuant to clause (a)(3)(B) above; (3) purchase, repurchase, redeem, legally defease, acquire or retire for value (i) any Subordinated Obligations (other than Existing Preferred Stock) in exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Debt or (ii) any 12 1/2% Cumulative Exchangeable Preferred Stock in exchange for 12 1/2% Exchange Debentures which 12 1/2% Exchange Debentures are substantially concurrently refinanced with Debt permitted under clause (n) of the definition of "PERMITTED DEBT"; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments; (4) repurchase shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (4)including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell, or are granted the option to purchase or sell, shares of such common stock; PROVIDED, HOWEVER, that: (5A) and the aggregate amount of such repurchases shall not exceed $1.0 million in any calendar year and (7B) below) at the time of such repurchase, no other Default or Event of Default shall have occurred and be continuing: continuing (1) or result therefrom); PROVIDED FURTHER, HOWEVER, that such repurchases shall be included in the payment of any dividend on any Capital Stock calculation of the Company within 60 days after the date amount of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)Restricted Payments; (25) the payment as long as no Default or Event of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the Default has occurred and is continuing, purchase, repurchase, redemption redeem, legally defease, acquire or other acquisition or retirement of any shares of any class of Capital retire for value outstanding Preferred Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined consideration received by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by from any Spectrum Sale as permitted under Section 4.10; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the Board of Directors calculation of the Company amount of Restricted Payments; (6) as long as no Default or Event of Default has occurred and is continuing, pay cash dividends (not constituting a return of capital) on the Existing Preferred Stock under the terms related to the payment of dividends on the Existing Preferred Stock as in an aggregate amount not effect on the Issue Date and described under "Description of Material Indebtedness and Preferred Stock" in the Offering Memorandum; PROVIDED, HOWEVER, that any cash dividends paid with respect to exceed $1,000,000 outstanding the Existing Preferred Stock shall reduce amounts otherwise available for Restricted Payments; and PROVIDED FURTHER, HOWEVER, in no event shall any such cash dividend be paid at any one time, the proceeds of which are used solely (a) to purchase common stock of time when the Company in connection with is permitted to pay a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of dividend on such stock optionsotherwise than in cash, or unless the Company would be required to pay such non-cash dividends at a rate higher than that applicable to cash dividends; (b7) to refinance loans, together with accrued interest thereon, made pursuant to item pay dividends on Disqualified Capital Stock solely in additional shares of Disqualified Capital Stock; (a) 8) make Restricted Payments in the aggregate of this clause (6)$15.0 million; and (79) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) make distributions or payments of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Receivables Fees. (c) The amount of all Restricted Payments (other Not later than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the making any Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers' Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in is permitted and setting forth the good faith determination of basis upon which the Company calculations required by this Section 4.08 were computed, which calculations may be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to based upon the Company’s 's latest available financial statements affecting Consolidated Net Income statements, and that no Default or Event of the Company for Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any periodRestricted Payments.

Appears in 1 contract

Samples: Indenture (Paxson Communications Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; , or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I1) no Default or Event of Default shall have occurred and be continuing; (II2) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a9.12(a) hereof; and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and . The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Third Supplemental Indenture (Comstock Oil & Gas GP, LLC)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); ) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) warrants, rights or any options, warrants options to purchase or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement shares of any Disqualified Capital Stock class of the Company solely in shares of Qualified such Capital Stock of the Company); ; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and that is subordinate or junior in right of payment to the Securities or any of its Restricted Subsidiaries), except Guarantee (other than Indebtedness described in any case out clause (7) of the proceeds definition of Permitted Refinancing Indebtedness”); or or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Paymentthereto: (Ia) no a Default or an Event of Default shall have occurred and be continuing;; or (IIb) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.4; andor (IIIc) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1the Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall not exceed the sum (without duplication) of the followingof: (Ai) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned after the Issue Date and on or prior to the date the Restricted Payment is made (the “Reference Date”) (treating such period as a single accounting period); plus (Bii) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value, or as determined in good faith by the Fair Market Value Board of Property Directors of the Company, of property other than cash, cash received after January 1, 2004 by the Company from the issuance or sale any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to any of its Restricted Subsidiaries) of shares the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company(other than Excluded Contributions); plus (Ciii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise without duplication of any optionsamounts included in clause (c)(ii) above, warrants or rights to purchase shares 100% of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds of any equity contribution received after January 1, 2004 by the Company from a holder of the issuance Company’s Capital Stock (other than Excluded Contributions); plus (iv) the amount by which Indebtedness of the Company or sale that of any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange after the Issue Date of any Indebtedness of the Company or any Indebtedness of its Restricted Subsidiaries incurred after the Issue Date into or for Qualified Capital Stock; plus (v) without duplication, the sum of: (a) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made after the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments; (b) the net cash proceeds received by the Company or any Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plusand (Ec) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary (valued in each case as provided in the definition of “Investment”). Notwithstanding the foregoing, not to exceed the provisions set forth in the case immediately preceding paragraph do not prohibit: (1) the payment of any Unrestricted Subsidiary dividend or other distribution within 60 days after the total amount date of Investments (declaration of such dividend or other than Permitted Investments) in such Unrestricted Subsidiary made by distribution if the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.dividend or other distribution would have been permitted on the date of declaration; (b2) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) if no Default or Event of Default shall have occurred and be continuing: (1) , the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereofredemption, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption retirement or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryCompany, either (a) solely in exchange forfor shares of Qualified Capital Stock of the Company, or out (b) through the application of the aggregate Net Cash Proceeds of, net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (43) if no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness of the Company that is subordinate or junior in right of payment to the Securities or a Guarantee either (a) solely in exchange forfor shares of Qualified Capital Stock of the Company, or out (b) through the application of the aggregate Net Cash Proceeds from, net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the CompanyCompany or Refinancing Indebtedness; (54) the purchaseif no Default or Event of Default shall have occurred and be continuing, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined repurchases by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company of securities of the Company from employees, directors or consultants of the Company or any Subsidiary of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such employees, directors or consultants or to the extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreement with such employees or directors of or consultants to the Company or any Subsidiary of the Company, in an aggregate amount not to exceed $1,000,000 outstanding at 15.0 million in any one timecalendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $30.0 million in any calendar year), provided that the proceeds cancellation of which are used solely (a) Indebtedness owing to purchase common stock the Company or any Restricted Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a restricted stock repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture; (5) the declaration and payment of dividends to holders of any class or employee stock purchase planseries of Preferred Stock of the Company, or provided that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Preferred Stock, after giving effect to exercise stock options received such issuance on a pro forma basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4; (6) the payment of dividends on the Company’s Common Stock in an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and$60.0 million per annum; (7) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company or any of its Restricted Subsidiaries issued in accordance with Section 4.4 to the extent such dividends are included in the definition of “Consolidated Fixed Charges”; (8) other Restricted Payments in an aggregate amount not to exceed $10,000,000100.0 million; (9) if no Default or Event of Default shall have occurred and be continuing, payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; (10) Investments that are made with Excluded Contributions; (11) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise; (12) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company; (13) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.17 and 4.18; (14) if no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, retirement or other acquisition of any shares of the Company’s Common Stock, provided that, at the time of such redemption, repurchase, retirement or other acquisition and after giving pro forma effect thereto, the Consolidated Leverage Ratio would be no greater than 1.0 to 1.0; and (15) if no Default or Event of Default shall have occurred and The actions described be continuing, payments of cash in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock the Company or any Restricted Subsidiary, which in the aggregate do not exceed $3.0 million. In determining the aggregate amount of Restricted Payments made after the Issue Date in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2), (3), (413) and (6) of this paragraph (b14) shall be Restricted Payments that shall be permitted to be made included in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other calculation. Not later than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the making any Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers’ Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance complies with this Indenture notwithstanding any subsequent adjustments made and setting forth in good faith to reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s latest available internal quarterly financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 1 contract

Samples: Indenture (Compass Minerals International Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares on account of the Company's or such Restricted Subsidiary's Capital Stock of the Company or any Restricted Subsidiary other Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company and dividends or in options, warrants distributions payable by a Restricted Subsidiary to a Restricted Subsidiary or other rights to purchase Qualified Capital Stock of the Company); ; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock or other Equity Interests of the Company or any Affiliate thereof of its Restricted Subsidiaries; (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and any that is subordinate or junior in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessSecurities; or or (4iv) make any Restricted Investment; Investment (all such payments or other actions described in clauses (i) through (iv) above dividends, distributions, purchases, redemptions, acquisitions, retirements, prepayments and Restricted Investments being collectively referred to as "Restricted Payments"), unless if, at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no a Default or Event of Default shall have occurred and be continuing;continuing or shall occur as a consequence thereof; or (IIb) immediately after such Restricted Payment and after giving pro forma effect thereto, the Company could incur shall not be able to issue $1.00 of additional Indebtedness in accordance with pursuant to paragraph (a) of Section 4.09(a) hereof4.04; andor (IIIc) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1August 18, 2004 shall not exceed 1997, without duplication, exceeds the sum of (without duplication) of the following: (A1) 50% of the aggregate Consolidated Net Income (including, for this purpose, gains or losses from Asset Sales) of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if in case such Consolidated Net Income shall be aggregate is a loss, minus 100% of such loss); plus ) for the period (Btaken as one accounting period) from the aggregate Net Cash Proceeds, or beginning of the Fair Market Value of Property other than cash, received after January fiscal quarter commencing March 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock 1997 and ended as of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company 's most recently ended fiscal quarter at the time of such conversion or exchangeRestricted Payment; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); plus (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out 100% of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of and the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount fair market value of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced property or the amount of any premium reasonably securities (as determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors in good faith) received by the Company from the issue or sale of Capital Stock or other Equity Interests of the Company in an aggregate amount not subsequent to exceed $1,000,000 outstanding at any one timeAugust 18, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments 1997 (other than cash(x) will be the Fair Market Value on the date of the Capital Stock or other Equity Interests issued or sold to a Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. Subsidiary and (d) In computing Consolidated Net Income under paragraph (a) above, (1y) the Company shall use audited financial statements for the portions issuance or sale of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.Disqualified Stock); plus

Appears in 1 contract

Samples: Indenture (Fedders North America Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or options to purchase or acquire shares of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or a Guarantor that is subordinate or junior in right of payment to the Notes (except for the purchase, defeasance, redemption, prepayment or other acquisition of such subordinate or junior Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any each case out due within one year of the proceeds date of Permitted Refinancing Indebtednessacquisition); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a "Restricted Payments”Payment"). (b) Notwithstanding clause (a) above and (c) below (once clause (c) becomes operative), unless at the time of and after giving effect to provisions set forth in the proposed Restricted Paymentimmediately preceding paragraph do not prohibit: (I1) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration; (2) if no Default or Event of Default shall have occurred and be continuing; (II) , the Company could incur $1.00 acquisition of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount any shares of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day Capital Stock of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment , either (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (Bi) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of solely in exchange for shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares (ii) through the appli- cation of Qualified Capital Stock net proceeds of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (43) if no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness of the Company that is subordinate or junior in right of payment to the Notes either (i) solely in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of for shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out (ii) through the application of the aggregate net cash proceeds of, of a substantially concurrent incurrence sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of Subordinated Indebtedness (a) shares of Qualified Capital Stock of the Company so long as or (ab) Refinancing Indebtedness; (4) if no Default or Event of Default exists or would result therefrom, (A) the principal amount Company may pay amounts required for any repurchase, redemption or other acquisition for value of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof any capital stock or options to be due and payable upon a declaration of acceleration thereof, such lesser amount as acquire capital stock of the date of determination) Company held by any director, officer, employee or consultant of the Subordinated Indebtedness being so purchasedCompany or any of its Subsidiaries pursuant to any equity subscription agreement or stock option agreement (5) or similar agreement, or otherwise upon their death, disability, retirement or termination of employment or departure from the board of directors of the Company (provided that the aggregate price paid for all such repurchased, redeemed, repaid, defeased, acquired or retired, plus retired capital stock and options (other than payments described in clause (4)(B)) shall not exceed (x) $1,000,000 in any twelve-month period or (y) $5,000,000 in the amount of any premium required to be paid aggregate from and after the Closing Date) and (B) in connection with such refinancing pursuant addition to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by amounts set forth in clause 4(A) the Company as necessary to accomplish such refinancing, plus may pay amounts required under the amount of expenses Missouri Stock Option Agreements in effect on the Closing Date if the trading market for the common stock of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent not sufficiently liquid as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notesprovided therein; (6) loans made to officers, directors the redemption or employees repurchase of any Capital Stock or Indebtedness of the Company Company, including the Notes, if required by any Gaming Authority or any Restricted Subsidiary approved by if determined, in the good faith judgment of the Board of Directors Directors, to be necessary to prevent the loss or to secure the grant or reinstatement of any gaming license or other right to conduct lawful gaming operations; and after the Company Conversion Date, Restricted Payments in an aggregate amount not to exceed $1,000,000 outstanding at any one time, 5.0 million in the proceeds of which are used solely aggregate. (c) Notwithstanding clause (a) above, subsequent to purchase common stock the Conversion Date, if at the time of such Restricted Payment or immediately after giving effect thereto, (i) a Default or an Event of Default shall not have occurred and be continuing and (ii) the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in connection compliance with a restricted stock or employee stock purchase planSection 6.1, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Company may make Restricted Payments in an aggregate amount from the Closing Date not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date excess of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of:

Appears in 1 contract

Samples: Senior Subordinated Credit Agreement (Ameristar Casinos Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of(including, without limitation, any liquidation preference) on any shares of the Company's Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire shares of such Qualified Capital Stock of the CompanyStock); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, directly or indirectly, its Capital Stock or any Capital Stock of any Affiliate of the Company (other than any such Capital Stock owned by the Company or a Wholly Owned Subsidiary of the Company) or options, warrants or other rights to acquire such Capital Stock; (iii) make any principal payment on, or repurchase, redeem, defease, retire or otherwise acquire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Indebtedness; (excluding iv) declare or pay any intercompany Indebtedness between dividend or among distribution (including, without limitation, any liquidation preference) on any Capital Stock of any Subsidiary to any Person (other than (a) to the Company and or any of its Restricted SubsidiariesWholly Owned Subsidiaries or (b) to all holders of Capital Stock of such Subsidiary on a pro rata basis), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4v) make any Restricted Investment; Investment in any Person (such payments or other actions described in clauses than any Permitted Investments) (i1) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of immediately before and immediately after giving effect to the such proposed Restricted Payment: (I) Payment on a pro forma basis, no Default or Event of Default shall have occurred and be continuing; ; (II2) immediately before and immediately after giving effect to such Restricted Payment on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under the provisions contained in accordance with Section 4.09(a1008(a); and (3) hereof; and (III) after giving effect to the proposed Restricted Payment, the aggregate amount of all such Restricted Payments declared or made after January 1the date of the date hereof, 2004 shall does not exceed the sum (without duplication) of the following:following (the "Basket"): (A) 50(i) the Cumulative Operating Cash Flow determined at the time of such Restricted Payment less (ii) 150% of cumulative Consolidated Interest Expense determined for the Consolidated Net Income period (treated as one accounting period) commencing on the date of the Company accrued on a cumulative basis during original issue of the period beginning on January 1, 2004 Securities and ending on the last day of the Company’s last most recent fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall for which consolidated financial information of the Company is required to be a loss, minus 100% of such loss); plusavailable; (B) (i) capital contributions to the Company after the date of this Indenture or (ii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plusCompany (except, in each case, to the extent such proceeds are used to purchase, redeem or otherwise retire Capital Stock or Subordinated Indebtedness as set forth below in clause (ii) or (iii) of paragraph (b) below); (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the date of this Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus; (D) the aggregate Net Cash Proceeds received after January 1, 2004 the date of this Indenture by the Company from the issuance conversion or sale (other than to any exchange, if any, of its Restricted Subsidiaries) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted of the Company or its Subsidiaries into or exchanged for Qualified Capital Stock of the CompanyCompany plus, together with to the extent such debt securities or Redeemable Capital Stock were issued after the date of this Indenture, the aggregate cash received by the Company at the time of such conversion or exchangeNet Cash Proceeds from their original issuance; plusand (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of the disposition or repayment of any Unrestricted Subsidiary Investment constituting a Restricted Payment, an amount equal to the total return of capital with respect to such Investment and the initial amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Investment. (b) Notwithstanding paragraph (a) abovethe foregoing, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), ii) through (4), (5) and (7vi) below) , so long as no Default or Event of Default shall have occurred and be continuing:, the foregoing provisions of this covenant shall not prohibit the following actions (each of clauses (i) through (vii) below being referred to as a "Permitted Payment"): (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied with payment was permitted by the provisions of paragraph (a) above (of this Section 1009 and such payment shall be have been deemed to have been paid on such date of declaration and shall not have been deemed a Permitted Payment for purposes of any the calculation required by the provisions of paragraph (a) above)of this Section 1009; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3ii) the repurchase, redemption redemption, or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company in exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of, other shares of Qualified Capital Stock of the Company; provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (v) (3)(B) of paragraph (a) of this Section 1009; (iii) the repurchase, redemption, defeasance, retirement or acquisition for value or payment of principal of any Restricted Subsidiary, Subordinated Indebtedness or Redeemable Capital Stock in exchange for, or out in an amount not in excess of the aggregate Net Cash Proceeds of, a substantially concurrent issue issuance and sale for cash (other than to a Restricted Subsidiaryany Subsidiary of the Company) of shares of any Qualified Capital Stock of the Company, provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (v) (3)(B) of paragraph (a) of this Section 1009; (4iv) the repurchase, redemption, repaymentdefeasance, defeasance or other retirement, refinancing, acquisition or retirement for value or payment of principal of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Redeemable Capital Stock) in exchange for, or out of (a "refinancing") through the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) issuance of new Subordinated Indebtedness of the Company so long as Company, provided that any such new Subordinated Indebtedness (a1) the shall be in a principal amount of such new Indebtedness that does not exceed the principal amount so refinanced (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, then such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired), plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (II) the amount of any premium reasonably determined by or other payment actually paid at such time to refinance the Company as necessary to accomplish such refinancingIndebtedness, plus plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing, ; (b2) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer greater than the remaining Average Life to Stated Maturity of the Notes and such new Indebtedness Securities; (3) has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesSecurities; and (4) is expressly subordinated in right of payment to the Securities at least to the same extent as the Subordinated Indebtedness to be refinanced; (6v) loans made the repurchase, redemption, defeasance, retirement, refinancing, acquisition for value or payment of any Redeemable Capital Stock through the substantially concurrent issuance of new Redeemable Capital Stock of the Company, provided that any such new Redeemable Capital Stock (1) shall have an aggregate liquidation preference that does not exceed the aggregate liquidation preference of the amount so refinanced; (2) has an Average Life to officersStated Maturity greater than the remaining Average Life to Stated Maturity of the Securities; and (3) has a Stated Maturity later than the Stated Maturity for the final scheduled principal payment of the Securities; (vi) the repurchase of shares of, directors or employees options to purchase shares of, common stock of the Company or any Restricted Subsidiary of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases in any calendar year shall not exceed $500,000 individually and $2.5 million in the aggregate; and (vii) the repurchase or redemption of warrants to purchase shares of Common Stock issued in connection with the Company's initial public offering that are outstanding prior to the Issue Date of the Company Securities in an amount which shall not exceed $100,000 in the aggregate and the repurchase of Common Stock of the Company, through open market purchases, in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination1,000,000. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.84

Appears in 1 contract

Samples: Indenture (Bell Technology Group LTD)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions:, (1i) declare or pay any dividend on, or any other distribution on any Equity Interests of the Company or any Restricted Subsidiary or make any other payment or distribution to the direct or indirect holders of, any shares (in their capacities as such) of Capital Stock Equity Interests of the Company or any Restricted Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in shares of Qualified Capital Stock Equity Interests of the Company or in options, warrants or other rights to purchase Qualified Capital Stock Equity Interests of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof Restricted Subsidiary (other than any Wholly Owned Restricted Subsidiary of such Equity Interests owned by the Company) Company or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the CompanyRestricted Subsidiary); (3iii) make any principal payment on or repurchasepurchase, redeem, defease or otherwise acquire or retire for value, or make any principal payment on, prior to any scheduled principal paymentmaturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; Investment in any Person (other than Permitted Investments) (any such payments payment or any other actions action (other than any exception thereto) described in clauses (i), (ii), (iii) through or (iv) above being collectively referred to as “each, a "Restricted Payments”Payment"), unless at the time of and after giving effect to the proposed Restricted Payment:unless (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time or immediately after giving effect to such Restricted Payment; (IIb) immediately after giving effect to such Restricted Payment, the Company could incur would be able to Incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under the Consolidated Coverage Ratio of the first paragraph of Section 4.09(a) hereof4.04; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after January 1, 2004 shall the Issue Date does not exceed an amount equal to the sum of (without duplication) of the following: (A1) 50% of the cumulative Consolidated Net Income determined for the period (taken as one period) 35 42 from the beginning of the Company accrued on a cumulative basis during first fiscal quarter commencing after the period beginning on January 1, 2004 Issue Date and ending on the last day of the Company’s last most recent fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment for which consolidated financial information of the Company is available (or, or if such cumulative Consolidated Net Income shall be a loss, minus 100% of such loss); plus , plus (B2) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company either (x) as capital contributions to the Company after the Issue Date or (y) from the issuance or issue and sale (other than to any a Restricted Subsidiary) of its Qualified Equity Interests after the Issue Date (excluding the net proceeds from any issuance and sale of Qualified Equity Interests financed, directly or indirectly, using funds borrowed from the Company or any Restricted SubsidiariesSubsidiary until and to the extent such borrowing is repaid), plus (3) the principal amount (or accreted amount (determined in accordance with GAAP), if less) of shares of Qualified Capital Stock any Indebtedness of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of Restricted Subsidiary Incurred after the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock Issue Date that have has been converted into or exchanged for Qualified Capital Stock Equity Interests of the Company, together plus (4) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) respect to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in any Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or Subsidiary that has been redesignated as a Restricted Subsidiary after January 1the Issue Date in accordance with "Designation of Unrestricted Subsidiaries" below, 2004 from the Company's proportionate interest in an amount equal to the excess of (x) the total assets of such Subsidiary, valued on an aggregate basis at Fair Market Value, over (y) the total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any Unrestricted case exceed the Designation Amount with respect to such Restricted Subsidiary or from upon its Designation), minus (5) the redesignation Designation Amount (measured as of the date of Designation) with respect to any Subsidiary of the Company that has been designated as an Unrestricted Subsidiary as a Restricted Subsidiary after the Issue Date in accordance with "Designation of Unrestricted Subsidiaries" below, plus (valued in each case as provided in the definition of “Investment”), 6) $10 million. The foregoing provisions will not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments prevent (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company or distribution on, or redemption of, Equity Interests within 60 days after the date of declaration thereofof such dividend or distribution or the giving of formal notice of such redemption, if at the date of such declaration date or giving of such declaration complied formal notice such payment or redemption would comply with the provisions of paragraph the Indenture, (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption redemption, retirement or other acquisition or retirement of any shares of any class of Capital Stock Equity Interests of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of, Qualified Equity Interests of the Company; provided, however, that any such net cash proceeds and the value of any Qualified Equity Interests issued in exchange for such retired Equity Interests are excluded from clause (c)(2) of the preceding paragraph (and were not included therein at any time) and are not used to redeem the Securities pursuant to paragraphs 5 or 6 of the Security, (iii) the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness, or any other payment thereon, made in exchange for, or out of the net cash proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of (x) Qualified Capital Stock Equity Interests of the Company; (4) ; provided, however, that any such net cash proceeds and the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Qualified Equity Interests issued in exchange for Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue are excluded from clauses (c)(2) and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determinationc)(3) of the preceding paragraph (and were not included therein at any time) and are not used to redeem the Securities pursuant to 5 or 6 of the Security or (y) Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required permitted to be paid in connection with such refinancing Incurred pursuant to the terms clause (g) of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancingsecond paragraph under Section 4.04, (biv) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, purchase of Equity Interests from officers and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time1 million, (v) the proceeds redemption of which are used solely the Company's zero coupon convertible subordinated debenture due 2002 and (avi) the declaration and payment of pro rata dividends or pro rata redemptions with respect to purchase holders of minority interests in the common stock of a Restricted Subsidiary of the Company Company; provided, however, that in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price case of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) each of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1ii), (3iii), (4iv), (v) and (6) vi), no Default or Event of Default shall have occurred and be continuing or would arise therefrom. In determining the amount of Restricted Payments permissible under the immediately preceding paragraph of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid covenant, amounts expended pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2i), (5iv) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiaryand, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) extent the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.redemption

Appears in 1 contract

Samples: Indenture (America Bank Note Holographics Inc)

Limitation on Restricted Payments. (a) The Company shall notwill not make, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actionsmake, any Restricted Payment, unless: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or immediately after giving effect to such Restricted Payment; (IIb) immediately after giving pro forma effect to such Restricted Payment, the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) hereof4.10; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Existing Notes Issue Date does not exceed the sum of (without duplication) of the following:): (A1) 50100% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to Cumulative EBITDA minus 1.4 times the date of such proposed Restricted Payment (or, if such Company’s Cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)Interest Expense; plus (B2) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value of securities or other property received by the Company, or the Fair Market Value of Property other than cash, received after January 1, 2004 by 2001, from (a) the Company from the issuance issue or sale of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock or Capital Stock of the Company or issued to any options, warrants or rights to purchase such shares of Qualified Capital Stock Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus (C3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company net reductions in Investments (other than from reductions in Permitted Investments) in any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries Person resulting from payments of interest on Indebtedness, dividends, repayments of loans loans, partial or advancestotal releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or other transfers from designations of assetsUnrestricted Subsidiaries as Restricted Subsidiaries, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in at the definition of “Investment”)fair market value thereof, not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.Person; plus (b4) Notwithstanding paragraph the aggregate balance of the Mirror Loan Indebtedness cancelled or terminated prior to the Issue Date. For purposes of determining under this clause (ac) abovethe amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and its Restricted Subsidiaries may take the following actions so long as (in the case good faith. The provisions of clauses (3), (4), (5) and (7) below) no Default or Event of Default this Section 4.11 shall have occurred and be continuingnot prohibit: (1i) the payment of any dividend on any Capital Stock of the Company distribution within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied payment would comply with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date this Indenture; provided, however, that in calculating the aggregate amount of declaration Restricted Payments for purposes of any Section 4.11(c), such amounts declared shall be included in the calculation required by but such amounts expended shall be excluded from the provisions of paragraph (a) above)calculation; (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryIndebtedness of the Company which is subordinated or pari passu in right of payment to the Notes by conversion into, or by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, however, that the amount of any such Net Proceeds that are utilized for any such retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation; (iii) the redemption or retirement of Indebtedness of the Company which is subordinated or pari passu in right of payment to the Notes in exchange for, by conversion into, or out of the Net Cash Proceeds of, a substantially concurrent issue and sale or incurrence of Indebtedness (it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the Company (other than any Indebtedness owed to a Subsidiary of the Company) that is, with respect to any such subordinated Indebtedness, contractually subordinated in right of payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired, with respect to any such pari passu Indebtedness, pari passu or subordinated in right of payment to the Notes and, with respect to any such subordinated or pari passu Indebtedness, (x) has a Stated Maturity no earlier than the 91st day after the Maturity Date or the final maturity date of the Indebtedness being redeemed or retired, whichever is earlier and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Indebtedness being redeemed or retired; provided, however, that the amount of any such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted SubsidiaryPayments for purposes of Section 4.11(c) amounts expended pursuant to this clause (iii) shall be excluded from the calculation; (iv) the funding of loans (but not including the forgiveness of any such loan) to executive officers, directors and shareholders for relocation loans, bonus advances and other purposes consistent with past practices or the purchase, redemption or other acquisition for value of shares of Qualified Capital Stock of the Company; (4) Parent or the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness Company (other than Disqualified Capital Stock) in exchange for, or out of options on such shares held by the aggregate net cash proceeds of, a substantially concurrent incurrence Parent’s or the Company’s or the Restricted Subsidiaries’ officers or employees or former officers or employees (other than to a Restricted Subsidiary) of Subordinated Indebtedness of or their estates or trusts or beneficiaries under their estates or trusts for the Company so long as (a) the principal amount benefit of such new Indebtedness does not exceed beneficiaries) upon the principal amount (ordeath, if disability, retirement or termination of employment of such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired current or retired, plus the amount of any premium required to be paid in connection with such refinancing former officers or employees pursuant to the terms of an employee benefit plan or any other agreement pursuant to which such shares of Capital Stock or options were issued or pursuant to a severance, buy-sell or right of first refusal agreement with such current or former officer or employee; provided that the Indebtedness refinanced or the aggregate amount of any premium reasonably determined by such loans funded and cash consideration paid, or distributions made, pursuant to this clause (iv) do not in any one fiscal year exceed $7 million; provided further, however, that in calculating the Company as necessary to accomplish such refinancing, plus the aggregate amount of expenses Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (iv) shall be excluded from the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notescalculation; (6v) loans made to officers, directors or employees the making of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company Investments in Unrestricted Subsidiaries and joint ventures in an aggregate amount not to exceed $1,000,000 outstanding at any one time30 million since the Issue Date; provided, the proceeds of which are used solely (a) to purchase common stock of however, that the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received the Restricted Subsidiaries may make additional Investments pursuant to this clause (v) up to an employee or director stock option plan or other incentive plan, in a principal aggregate amount not to exceed $20 million if the exercise price Company is able, at the time of any such stock optionsInvestment and immediately after giving effect thereto, or to incur at least $1.00 of additional Indebtedness (bother than Permitted Indebtedness) in compliance with Section 4.10; provided further, however, that in calculating the aggregate amount of Restricted Payments made subsequent to refinance loansthe Issue Date for purposes of Section 4.11(c), together with accrued interest thereon, made amounts expended pursuant to item (a) of this clause (6v) shall be included in the calculation; (vi) distributions by the Company to Parent to permit Parent to pay obligations actually incurred by Parent in respect of the payment of operating expenses of the Company or the Restricted Subsidiaries in an aggregate amount in any fiscal year not to exceed 5% of the total operating expenses of the Company and the Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP and Tax Payments permitted by Section 4.14(b)(v); provided, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (vi) shall be excluded from the calculation; and (7vii) other Restricted Payments in an aggregate amount not to exceed $10,000,000500,000 in any fiscal year of the Company; and The actions described provided, however, that in clauses (1calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (3), (4) and (6) of this paragraph (bvii) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would included in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodcalculation.

Appears in 1 contract

Samples: Indenture (Lamar Advertising Co/New)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire such shares of Qualified Capital Stock Stock) (other than the declaration or payment of dividends or distributions to the Companyextent declared or paid to the Company or any Restricted Subsidiary); (2ii) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Company or any Affiliate thereof of the Company (other than Capital Stock of any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and or any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing IndebtednessSubsidiary; or (4iv) make any Restricted Investment (other than any Permitted Investment; ) in any Person (such payments or other actions described in (but not excluded from) clauses (i) through (iv) above being are collectively referred to as "Restricted Payments"), unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment:Payment (the amount of any such Restricted (I1) no Default or Event of Default shall have occurred and be continuing; , (II2) the Company could incur at least $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) pursuant to Section 4.09(a) hereof; and 1008 and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issuance Date shall not exceed the sum (without duplication) of the followingof: (A) 50% of the Consolidated Adjusted Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 the Issuance Date and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Adjusted Net Income shall be a loss, minus 100% of such loss); plus, PLUS (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 the Issuance Date by the Company from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of shares of Qualified Capital Stock of the Company or any (including upon the exercise of options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (Crights) the aggregate Net Cash Proceedsor warrants, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants options or rights to purchase shares of Qualified Capital Stock of the Company; plus, PLUS (DC) the aggregate Net Cash Proceeds net cash proceeds received after January 1, 2004 the Issuance Date by the Company from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, to the extent such securities were originally sold for cash, together with the aggregate net cash proceeds received by the Company (other than from a Subsidiary) in connection with such conversion or exchange, PLUS (D) to the extent that any Investment constituting a Restricted Payment that was made after the Issuance Date is sold or is otherwise liquidated or repaid, an amount (to the extent not included in Consolidated Adjusted Net Income) equal to the lesser of (x) the cash proceeds with respect to such Investment (less the cost of the disposition of such Investment and net of taxes) and (y) the initial amount of such Investment, PLUS (E) so long as the Designation thereof was treated as a Restricted Payment that was made after the Issuance Date, with respect to any Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary after the Issuance Date in accordance with Section 1019, the Fair Market Value of the Company's interest in such Subsidiary at the time of such conversion or exchangeredesignation; plus (E) PROVIDED that such amount shall not in any case exceed the Designation Amount with respect to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a such Restricted Subsidiary after January 1upon its Designation, 2004 from MINUS the Designation Amount (measured as of the date of Designation) with respect to any Unrestricted Restricted Subsidiary or from the redesignation of which has been designated as an Unrestricted Subsidiary as a Restricted Subsidiary after the date of the Indenture in accordance with Section 1013, PLUS (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted InvestmentsF) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004$1 million. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of with respect to clauses (3ii), (4iii), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.,

Appears in 1 contract

Samples: Indenture (Supreme International Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any on or in respect of shares of Capital Stock of the Company or any its Restricted Subsidiary (Subsidiaries to holders of such Capital Stock, other than (i) dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company), (ii) dividends and distributions payable to the Company or another Restricted Subsidiary of the Company and (iii) pro rata dividends or distributions payable by a Restricted Subsidiary of the Company that is not a Wholly-Owned Subsidiary of the Company to minority holders of Capital Stock of such Restricted Subsidiary; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of exchange for Qualified Capital Stock of the Company); (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay or otherwise acquire or retire for value, prior to any scheduled principal final maturity, scheduled repayment or scheduled - 39 - sinking fund payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and or any Guarantor that is subordinate or junior in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessNotes or a Guarantee; or (4) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as “Restricted Payments”a "RESTRICTED PAYMENT"), unless ; if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Payment:thereto, (Ii) no a Default or an Event of Default shall have occurred and be continuing;; or (IIii) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereofSECTION 4.12; andor (IIIiii) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of including such proposed Restricted Payment Payment) made subsequent to the Issue Date (orthe amount expended for such purposes, if such Consolidated Net Income shall be a lossother than in cash, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or being the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included property as determined in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved good faith by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in thereof) shall exceed the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of:

Appears in 1 contract

Samples: Indenture (Mortons Restaurant Group Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actionsmake any Restricted Payment; provided, however, that: (1a) declare So long as the Company is Solvent and no Default or pay Event of Default has occurred and is continuing or would occur as a result thereof, the Company may make the following Restricted Payments: (a) any dividend onor other distribution, direct or make indirect, on account of any other distribution to holders of, any shares of Capital Stock of the Company such Person now or any Restricted Subsidiary (other than dividends or distributions hereafter outstanding which is payable solely in shares of Qualified Common Stock; (b) any regularly scheduled payments of principal of and/or interest on any Subordinated Indebtedness made in accordance with the terms and provisions of the Subordinated Agreements; (c) any sales or transfers of Automobile Contracts (or pools thereof) between or among the Company and its Subsidiaries in connection with any Securitization Transaction (including any Warehouse Financing Transaction); (d) any purchases by the Company of its Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of under the Company’s Employee Savings (401(k); ) Plan; or (2e) purchase, redeem the cancellation or otherwise acquire or retire for value acquisition of any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary as payment to the Company of the Companyexercise price of any Equity Rights; (b) or The following shall not constitute a Restricted Payment: (a) any options, warrants dividend or other rights to acquire such distribution, direct or indirect, on account of any Capital Stock (other than the purchase, redemption, acquisition now or retirement hereafter outstanding) of any Disqualified Subsidiary to the Company; or (b) any dividend or other distribution, direct or indirect, on account of any Capital Stock (now or hereafter outstanding) of the Company solely in shares of Qualified Capital Stock of the Company)any Subsidiary that is not a Subsidiary Guarantor to any other Subsidiary that is a Subsidiary Guarantor; (3c) The Company may make any redemptions or purchases of Common Stock held by the public and/or of principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments RISRS or other actions described in clauses (i) through (iv) above being collectively referred to the PENS as “Restricted Payments”)permitted under, unless at the time of and after giving effect subject to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred terms of, that certain consent letter dated November 15, 2002, between the Purchaser and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereofCompany; and (IIId) The Company may pay all outstanding principal of, and accrued and unpaid interest on, the aggregate amount of all Restricted Payments declared or made after January 1PENS on April 15, 2004 shall not exceed 2004, the sum (without duplication) maturity date of the following: (A) 50% of the Consolidated Net Income of PENS. In addition, the Company accrued advised the Purchaser that on or about November 30, 2003, the Company made a cumulative basis during Restricted Payment to FSA when it purchased the period beginning on January 1, 2004 and ending on the last day FSA Warrant from FSA for an aggregate purchase price in cash of the Company’s last fiscal quarter ending prior approximately $896,500. The Purchaser consents to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary payment made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, consideration for the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock purchase of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereofFSA Warrant, such lesser amount consent being effective as of the date of determination) such payment. (The consent provided for in this paragraph is limited to the specific instance in which it is given and does not give rise to any obligation on the part of the Subordinated Indebtedness being so purchasedPurchaser to grant any future consents, redeemed, repaid, defeased, acquired waivers or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6amendments.); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Securities Purchase Agreement (Levine Leichtman Capital Partners Ii Lp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”)Payment if, unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no any Default or Event of Default shall would have occurred and be continuing; (IIb) the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with pursuant to clause (a) of Section 4.09(a) hereof4.11; andor (IIIc) the aggregate amount of expended or declared for all Restricted Payments declared or made after January 1, 2004 shall not from the Reference Date would exceed the sum of (without duplication) of the following:): (A1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning (treated as one accounting period) commencing on January 1, 2004 the Reference Date and ending on the last day of the Company’s last fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment (or, if such aggregate Consolidated Net Income shall be a loss, minus 100% of such loss); plus, (B2) the aggregate Net Cash Proceedsnet cash proceeds, or the Fair Market Value of Property other than cash (provided that, in the case of Property that is Capital Stock, such Capital Stock falls within the meaning of clause (b) of the definition of “Additional Assets”), received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) by the Company of its Capital Stock (other than Disqualified Stock) after the Reference Date, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof, (3) the aggregate net cash proceeds, or the Fair Market Value of Property other than cash, received by the Company as capital contributions to the Company (other than from a Subsidiary of the Company) on or after January 1, 2004 the Reference Date, (4) the aggregate net cash proceeds received by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock Subsidiary of the Company or any options, warrants an employee stock ownership plan or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 trust established by the Company (other than from or any such Subsidiary for the benefit of its Restricted Subsidiariestheir employees) upon on or after the exercise Reference Date of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of convertible Indebtedness or shares of Disqualified Capital Stock that have has been converted into or exchanged for Qualified Capital Stock (other than Disqualified Stock) of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plusexchange or received by the Company from any conversion or exchange of convertible Indebtedness issued or sold (other than to any Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) prior to the Reference Date, excluding: (EA) any such Indebtedness issued or sold to the Company or a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees, and (B) the aggregate amount of any cash or other Property distributed by the Company or any Restricted Subsidiary upon any such conversion or exchange, (5) to the extent not otherwise included in the Company’s Consolidated Net Income, an amount equal to the net reduction in Investments made by the Company and its Restricted Subsidiaries subsequent to the Reference Date in Unrestricted Subsidiaries any Person resulting from from: (A) payments of interest on debt, dividends, repayments of loans or advances, advances or other transfers or distributions of assetsProperty, in each case to the Company or any Restricted Subsidiary from any Person other than the Company or a Restricted Subsidiary after January 1Subsidiary, 2004 from and in an amount not to exceed the book value of such Investments previously made in such Person that were treated as Restricted Payments, or (B) the designation of any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued Subsidiary, and in each case as provided in the definition of “Investment”), an amount not to exceed in the case lesser of: (i) the book value of any Unrestricted Subsidiary the total amount of all Investments (other than Permitted Investments) previously made in such Unrestricted Subsidiary made by that were treated as Restricted Payments, and (ii) the Company Fair Market Value of the Company’s and its Restricted Subsidiaries Subsidiaries’ interest in such Unrestricted Subsidiary after January 1Subsidiary, 2004.and (b6) Notwithstanding $30.0 million. The limitations set forth in the preceding paragraph (a) above, will not prevent the Company and its or any Restricted Subsidiaries may take Subsidiary from making the following actions Restricted Payments so long as (in as, at the case of clauses (3)time thereof, (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1a) the payment of any dividend on any Capital Stock of the Company or any Restricted Subsidiary within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to dividend could have been paid on such date of declaration for purposes of any calculation required by in compliance with the provisions of paragraph (a) above)preceding paragraph; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3b) the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any of its Subsidiaries pursuant to the terms of agreements (including employment agreements) or plans (including employee stock ownership plans but excluding other plans to purchase such Capital Stock in open market transactions, together with, in the case of employee stock ownership plans, loans to or Investments therein in an amount sufficient to fund such repurchase, redemption or other acquisition or retirement by such plan) approved by the Company’s Board of Directors, including any such repurchase, redemption, acquisition or retirement of shares of such Capital Stock that is deemed to occur upon the exercise of stock options or vesting of restricted stock grants or similar rights if such shares represent all or a portion of the exercise price or are netted out or surrendered in connection with satisfying Federal income tax obligations; provided, however, that the aggregate amount of such repurchase, redemptions, acquisitions and retirements (but disregarding any class transaction that does not result in the payment of cash by the Company or any Restricted Subsidiary to or on behalf of another Person) shall not exceed the sum of: (1) $7.5 million in any twelve-month period, and (2) the aggregate net proceeds, if any, received by the Company during such twelve-month period from any issuance of such Capital Stock pursuant to such agreements or plans; (c) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of, a substantially concurrent issue issuance and sale (other than to a Restricted SubsidiarySubsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries, for the benefit of their employees) of shares of Qualified Capital Stock of the CompanyCompany (other than Disqualified Stock); (4d) the purchase, redemption, legal defeasance, acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees); (e) the making of any principal payment on or the repurchase, redemption, repayment, legal defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, net proceeds of a substantially concurrent issue and sale Incurrence (other than a sale to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the Company; ) of (5i) the purchase, redemption, repayment, defeasance or any other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated Permitted Refinancing Indebtedness or (ii) with respect only to the Notes Company’s 9⅜% senior subordinated notes due 2012, Senior Indebtedness, so long as at the time of and after giving effect to such Incurrence, the Company could Incur at least $1.00 of Indebtedness pursuant to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and clause (ca) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment Section 4.11 of the Notes;this Indenture. (6f) loans loans, in an aggregate principal amount at any one time outstanding of not more than $2.0 million, made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors (or by a duly authorized officer) and in compliance with the Sxxxxxxx-Xxxxx Act of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time2002, the net cash proceeds of which are used solely solely: (a1) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the purchase price of such common stock or the exercise price of such stock options, or or (b2) to refinance loans, together with accrued interest thereon, made pursuant to item (a1) of this clause (6f); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and . The actions described in clauses (1), (3), (4a) and (6b) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made included in accordance with this paragraph (b) but shall reduce the calculation of the amount that would otherwise be available for of Restricted Payments under clause Payments. The actions described in clauses (3c), (d), (e) of paragraph and (a) (provided that any dividend paid pursuant to clause (1f) of this paragraph (b) shall reduce be excluded in the calculation of the amount of Restricted Payments, provided that would otherwise be available under clause (3) the net cash proceeds from any issuance or sale of paragraph (a) when declared, but not also when subsequently paid Capital Stock or Indebtedness of the Company pursuant to such clause (1)c), and the actions described in clauses (d) or (e) shall be excluded from any calculations pursuant to clause (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph or (a). (c4) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodimmediately preceding paragraph.

Appears in 1 contract

Samples: First Supplemental Indenture (Swift Energy Co)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: : (1i) declare or pay any dividend on, or make any other payment or distribution to holders ofon account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any shares of Capital Stock payment in connection with any merger or consolidation involving the Company) or to the direct or indirect holders of the Company Company's or any of its Restricted Subsidiary Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or Equity Interests (other rights to purchase Qualified Capital Stock than Disqualified Stock) of the Company); ; (2ii) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any Capital Stock of merger or consolidation involving the Company or Company) any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary Equity Interests of the Company) or any options, warrants or other rights to acquire such Capital Stock ; (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out a payment of the proceeds of Permitted Refinancing Indebtednessinterest or principal at Stated Maturity; or or (4iv) make any Restricted Investment; Investment (all such payments or and other actions described set forth in clauses (i) through (iv) above being collectively referred to as "Restricted Payments"), unless unless, at the time of and after giving effect to the proposed such Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuing;continuing or would occur as a consequence thereof; and (IIb) the Company could would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in accordance with the first paragraph of Section 4.09(a) 4.08 hereof; and (IIIc) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared made by the Company and its Subsidiaries on or made after January 1the date hereof (excluding Restricted Payments permitted by clauses (ii), 2004 shall not exceed (iii), (iv) and (v) (but only to the sum extent of the dividends paid to the Company or its Wholly Owned Restricted Subsidiaries pursuant to such clause (without duplicationv)) of the following: next succeeding paragraph), is less than the sum of (Ai) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during for the period (taken as one accounting period) from the beginning on January 1, 2004 and ending on of the last day first fiscal quarter commencing after the date hereof to the end of the Company’s last 's most recently ended fiscal quarter ending prior to for which internal financial statements are available at the date time of such proposed Restricted Payment (or, if such Consolidated Net Income shall be for such period is a lossdeficit, minus less 100% of such lossdeficit); plus , plus (Bii) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company from the issuance issue or sale (other than to any since the date hereof of its Restricted Subsidiaries) Equity Interests of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted SubsidiariesDisqualified Stock) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Disqualified Stock or debt securities of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into such Equity Interests (other than Equity Interests (or exchanged for Qualified Capital Disqualified Stock or convertible debt securities) sold to a Subsidiary of the CompanyCompany and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus plus (Eiii) to the extent not that any Restricted Investment that was made after the date hereof is sold for cash or otherwise included in Consolidated Net Incomeliquidated or repaid for cash, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividendslesser of (A) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, repayments if any) and (B) the initial amount of loans or advances, or other transfers of assets, in each case to such Restricted Investment. The foregoing provisions shall not prohibit (i) the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case payment of any Unrestricted Subsidiary dividend within 60 days after the total amount date of Investments declaration thereof, if at said date of declaration such payment would have complied with the provisions hereof; (other than Permitted Investmentsii) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: , the redemption, repurchase, defeasance, retirement or other acquisition of any Subordinated Indebtedness or Equity Interests of the Company in exchange for, or out of the net cash proceeds of, the substantially concurrent sale (1other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, defeasance, retirement or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph; (iii) so long as no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, defeasance, retirement or other acquisition of any Subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) so long as no Default or Event of Default shall have occurred and be continuing, the retirement of any shares of Disqualified Stock by conversion into, or by exchange for, shares of Disqualified Stock, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Disqualified Stock; provided that (a) such Disqualified Stock is not subject to mandatory redemption earlier than the maturity of the Notes, (b) such Disqualified Stock is in an aggregate liquidation preference that is equal to or less than the sum of (x) the aggregate liquidation preference of the Disqualified Stock being retired, (y) the amount of accrued and unpaid dividends, if any, and premiums owed, if any, on the Disqualified Stock being retired and (z) the amount of customary fees, expenses and costs related to the incurrence of such Disqualified Stock and (c) such Disqualified Stock is incurred by the same Person that initially incurred the Disqualified Stock being retired, except that the Company may incur Disqualified Stock to refund or refinance Disqualified Stock of any Wholly Owned Subsidiary of the Company; (v) the payment of any dividend on any Capital Stock by a Restricted Subsidiary of the Company within 60 days after to the date holders of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph its Equity Interests on a pro rata basis; (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2vi) the payment of any dividend payable from a Restricted Subsidiary cash dividends on the Existing Preferred Stock when such dividends are required to be paid in accordance with the Certificate of Designation with respect to the Company Existing Preferred Stock; (vii) so long as no Default or any other Restricted Subsidiary Event of the Company; (3) Default shall have occurred and be continuing, the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees Equity Interests of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company held by any member of the Company's (or any of its Restricted Subsidiaries') management pursuant to any management equity subscription agreement or stock option agreement in an effect as of the date hereof; provided that the aggregate amount price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not to exceed $1,000,000 outstanding at 300,000 in any one timetwelve-month period; (viii) so long as no Default or Event of Default shall have occurred and be continuing, repurchases of Equity Interests deemed to occur upon the proceeds exercise of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant or warrants upon surrender of Equity Interests to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed pay the exercise price of such stock optionsoptions or warrants; and (ix) so long as no Default or Event of Default shall have occurred and be continuing, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,0001.0 million since the date hereof. The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default; provided that in no event shall the business currently operated by AmeriTel, Xxxxxx Telecommunications, Xxxxxx of Carolina or Xxxxxx STC be transferred to or held by any Subsidiary other than a Wholly Owned Restricted Subsidiary. For purposes of making such determination, all outstanding Investments by the Company and The actions described its Restricted Subsidiaries (except to the extent repaid in clauses (1), (3), (4cash) and (6) of this paragraph (b) shall in the Subsidiary so designated will be deemed to be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall at the time of such designation and will reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the greatest of (bx) shall reduce the amount that would otherwise be available under clause (3) net book value of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and Investments at the actions described in clauses (2)time of such designation, (5y) the fair market value of such Investments at the time of such designation and (7z) the original fair market value of this paragraph (b) shall such Investments at the time they were made. Such designation will only be permitted to if such Restricted Payment would be taken in accordance with this paragraph permitted at such time and shall not reduce if such Restricted Subsidiary otherwise meets the amount that would otherwise be available for Restricted Payments under clause (3) definition of paragraph (a). (c) an Unrestricted Subsidiary. The amount of all Restricted Payments (other than cash) will shall be the Fair Market Value fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions . The fair market value of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such any non-cash Restricted Payment shall be deemed to have been made in compliance determined by the Board of Directors of the Company, whose resolution with this Indenture notwithstanding any subsequent adjustments made in good faith respect thereto shall be delivered to the Company’s financial statements affecting Consolidated Net Income Trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $5.0 million. Not later than the date of making any Restricted Payment, the Company for shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed, and that no Default or Event of Default will result from making the Restricted Payment, together with a copy of any periodfairness opinion or appraisal required by this Indenture.

Appears in 1 contract

Samples: Indenture (Talton Invision Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectlymake any Restricted Payment, take except that, so long as the representations and warranties deemed to be made pursuant to Section 11.7(b) are true and correct in all material respects as of the date such Restricted Payment is made, the following actionsRestricted Payments may be made: (1i) declare Restricted Payments on account of amounts payable under the Prior Tax Sharing Agreement, with respect to state and local taxes and federal taxes; provided, however, that no such Restricted Payment (whether in cash or pay any dividend onotherwise) shall be made more than ten Business Days prior to the date upon which the related liability to the Internal Revenue Service (or the relevant state or local taxing authority) for tax (including estimated taxes paid) is paid (or, or make any other distribution to holders ofif no such taxes are payable, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Companyordinarily would have been due); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof [Intentionally Omitted.]; (other than any Wholly Owned iii) Restricted Subsidiary of the Company) or any options, warrants or other rights Payments made from time to acquire such Capital Stock (other than the time to finance Revlon’s purchase, redemption, acquisition or retirement for value of, or payment of amounts owing in respect of, any Disqualified Capital Stock shares, interests, rights to purchase, warrants, options, participations, stock appreciation rights, performance units or other equivalents or interests in the equity of Revlon held by any current or former director, officer, consultant or employee of Revlon, the Company or any Subsidiary of the Company solely in shares such person’s role as a director, officer, consultant or employee (or by their estates or any beneficiaries of Qualified Capital Stock their estates); provided, however, that (x) the sum of (1) the Companyaggregate amount of Restricted Payments made pursuant to this clause (iii) and (2) the aggregate amount of open-market purchases of common stock and restricted stock of Revlon together with any other investments made as permitted under Section 11.8(g), does not exceed $15,000,000, plus $8,000,000 for each calendar year commencing with calendar year 2011 and (y) amounts available pursuant to this clause (iii) to be utilized for Restricted Payments during any calendar year which are not utilized during such year may be carried forward and utilized in any succeeding calendar year; (iv) subject to the limitations set forth in Section 11.8(g), Restricted Payments made from time to time to finance the Investments contemplated by Section 11.8(g); (3v) make any principal the declaration and payment on of dividends by the Company to its Parent in amounts required for the Parent to pay: (A) actual expenses, other than those paid to Affiliates of the Company, incidental to being a publicly reporting company; (B) so long as the Company is a member of a consolidated, combined, unitary or repurchasesimilar group with the Parent for U.S. federal, redeemstate or local income tax purposes, defease or otherwise acquire or retire for value(1) federal, prior state and local income taxes incurred by such Parent companies, but only to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the extent such income taxes are attributable to the income of the Company and the Recourse Subsidiaries, provided that in each case the amount of such payments with respect to any fiscal year does not exceed the amount that the Company and the Recourse Subsidiaries would have been required to pay in respect of such income taxes for such fiscal year were the Company and its Restricted Recourse Subsidiaries a consolidated or combined group of which the Company was the common Parent, and (2) amounts required to pay federal, state and local income taxes to the extent attributable to the income of the Non-Recourse Subsidiaries, if any, but only to the extent of the amount actually received by the Company from such Non-Recourse Subsidiaries; and (C) so long as no Default has occurred and is continuing (after giving effect thereto), except reasonable fees and expenses incurred in connection with any successful or unsuccessful debt or equity offering or any successful or unsuccessful acquisition or strategic transaction by the Parent; (vi) so long as no Default has occurred and is continuing (after giving effect thereto), additional Restricted Payments to a Parent or any Affiliate of the Company, whether in respect of management fees or otherwise, in an aggregate amount which, when taken together with the aggregate amount of all defeasances, prepayments and repurchases of Indebtedness made pursuant to clause (ix) of Section 11.9(c) does not exceed $10,000,000, plus $10,000,000 for each calendar year commencing with calendar year 2011; provided, that the Company may carry over and utilize in any case out subsequent calendar year, in addition to the amounts permitted for such fiscal year, any portion of the proceeds amounts otherwise permitted for prior calendar years to be paid pursuant to this clause (vi) that were not in fact utilized to make Restricted Payments pursuant to this clause (vi) or to defease, prepay or repurchase Indebtedness pursuant to clause (ix) of Permitted Refinancing Indebtedness; orSection 11.9(c); (4vii) make any Restricted Investment; so long as no Default has occurred and is continuing (such payments or after giving effect thereto), other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”); provided, unless that at the time of of, and after giving effect to, such Restricted Payments, (x) as of the last day of the most recent four consecutive fiscal quarters with respect to which financial statements shall have been delivered pursuant to Section 10.1, the proposed Restricted Payment:Consolidated Fixed Charge Coverage Ratio of the Company and its Subsidiaries shall not be less than 1.1:1.0 on a pro forma basis and (y) the Excess Availability shall be greater than 25% of the Maximum Availability; (Iviii) so long as no Default or Event of Default shall have occurred and be continuing; continuing (IIafter giving effect thereto), other Restricted Payments in an amount which, when taken together with (A) all other Restricted Payments made pursuant to this clause (viii) after the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and Effective Date and (IIIB) the aggregate amount of all Restricted Payments declared or defeasances, prepayments and repurchases of Indebtedness made pursuant to clause (x) of Section 11.9(c) after January 1the Effective Date, 2004 shall do not exceed the sum (without duplication) of the following:$35,000,000; (Aix) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as no Default has occurred and is continuing (in the case of clauses (3after giving effect thereto), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000the aggregate net cash proceeds of Available Contributions; provided, that at the time of, and The actions described in clauses (1)after giving effect to, (3)such Restricted Payments, (4) and (6) of this paragraph (b) the Excess Availability shall be Restricted Payments that shall be permitted greater than 25% of the Maximum Availability; (x) so long as no Default has occurred and is continuing after giving effect to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend such transactions: amounts paid or property transferred pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Company Tax Sharing Agreement.; (cxi) The amount any “deemed dividend” for accounting purposes resulting from, or in connection with the filing of all Restricted Payments a consolidated or combined federal income tax return by any Parent or any direct or indirect parent or Subsidiary of any Parent (other than cash) will be and not involving any cash distribution from the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued Company except as permitted by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.Tax Sharing Agreement); and (dxii) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions payments of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and Receivables Fees other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted than to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodParent.

Appears in 1 contract

Samples: Revolving Credit Agreement (Revlon Consumer Products Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of the Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1a) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company) on or in respect of shares of its Capital Stock to holders of such Capital Stock (including by means of a Person (including an Unrestricted Subsidiary) making such a payment with the proceeds of an Investment made by the Company or any Restricted Subsidiary); (2b) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than warrants, rights or options to purchase or acquire shares -55- of any Wholly Owned Restricted Subsidiary class of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than including by means of a Person (including an Unrestricted Subsidiary) making such a payment with the purchase, redemption, acquisition or retirement proceeds of any Disqualified Capital Stock of an Investment made by the Company solely in shares of Qualified Capital Stock of the Companyor any Restricted Subsidiary); (3c) make any principal payment on on, or repurchasepurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany other than the principal payment on, or the purchase, redemption, defeasance, retirement or other acquisition for value of, Subordinated Indebtedness between made in satisfaction of or among the Company and any anticipation of its Restricted Subsidiaries)satisfying a sinking fund obligation, except in any case out principal installment or final maturity within one year of the proceeds due date of Permitted Refinancing Indebtednesssuch obligation, installment or final maturity); or (4d) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other each of the foregoing actions described set forth in clauses (ia), (b), (c) through and (ivd) above being collectively referred to as a "Restricted Payments”Payment"), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Paymentthereto: (I1) no a Default or an Event of Default shall have occurred and be continuing; (II2) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.03; andor (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of including such proposed Restricted Payment Payment) made after March 31, 2003 (orthe amount expended for such purpose, if such Consolidated Net Income shall be a lossother than in cash, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or being the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included property as determined reasonably and in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved good faith by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (aCompany) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to shall exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.sum of:

Appears in 1 contract

Samples: Indenture (Tenneco Automotive Inc)

Limitation on Restricted Payments. (a) The Company shall notAt any time a Collateral/Covenant Release Period is not in effect, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock (other than Disqualified Stock)) of Holding, Intermediate Holding or the Company or in options, warrants or other rights to purchase Qualified Capital Stock of Holding, Intermediate Holding or the Company); (2) purchase, redeem on, or otherwise acquire make any payment on account of, or retire set apart assets for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants a sinking or other rights to acquire such Capital Stock (other than analogous fund for, the purchase, redemption, acquisition or defeasance, retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of of, any shares of any class of Capital Stock of the Company or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other distribution (other than distributions payable solely in Capital Stock (other than Disqualified Stock) of Holding, Intermediate Holding or the Company or options, warrants or other rights to purchase Capital Stock of Holding, Intermediate Holding or the Company) in respect thereof (any such dividend, payment, set apart, purchase, redemption, defeasance, retirement, acquisition or distribution, a “Restricted SubsidiaryPayment”), either directly or indirectly, whether in cash or property or in obligations of the Company, except that: (a) the Company may declare and pay cash dividends in an amount sufficient to allow Holding and/or Intermediate Holding to pay expenses incurred in the ordinary course of business; (b) the Company may declare and pay cash dividends in an amount sufficient to cover reasonable and necessary expenses (including professional fees and expenses) incurred by Holding and/or Intermediate Holding in connection with (i) registration, public offerings and exchange listing of equity or debt securities and maintenance of the same, (ii) compliance with reporting obligations under, or in connection with compliance with, federal or state laws or under this Agreement or any of the other Loan Documents and (iii) indemnification and reimbursement of directors, officers and employees in respect of liabilities relating to their serving in any such capacity, or obligations in respect of director and officer insurance (including premiums therefor); (c) the Company may declare and pay cash dividends to Intermediate Holding in an amount not in excess of the amount necessary to pay income Taxes to be paid by Intermediate Holding, Holding and any other Person that owns any Capital Stock in Intermediate Holding to any taxing authority imposed on their respective allocable shares of the taxable income of Intermediate Holding and its Subsidiaries; (d) to the extent constituting a Restricted Payment, the Company and its Subsidiaries may consummate the issuance or sale of Capital Stock (other than Disqualified Stock) permitted by subsection 8.6(j); (e) the Company may declare and pay cash dividends in an amount sufficient to allow Holding and/or Intermediate Holding to pay all fees and expenses incurred in connection with the transactions expressly contemplated by this Agreement and the other Loan Documents, and to allow Holding and/or Intermediate Holding to perform its obligations under or in connection with the Loan Documents to which it is a party; (f) the Company may redeem, repurchase, retire, defease or otherwise acquire its Capital Stock in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of, a the substantially concurrent issue and sale or issuance (other than to a Restricted Subsidiary) of shares of Qualified its Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock); (g) in exchange for, or out the Company may pay any dividend within 60 days after the date of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness declaration of the dividend by Holding if, at the date of declaration, the dividend payment would have complied with the provisions of this subsection 8.7; (h) the Company may declare and pay other Restricted Payments so long as (ai) the principal Company is in Pro Forma Compliance after giving effect thereto, (ii) no Event of Default exists or would result therefrom and (iii) the aggregate amount of Restricted Payments previously made pursuant to this subsection 8.7(h) after the Available Amount Start Date is not in excess of the Cumulative Available Amount in effect on such new Indebtedness does date and not exceed being utilized for Investments pursuant to subsection 8.8(p) (and such Restricted Payments shall then reduce the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount Cumulative Available Amount as of provided therein on the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notesthereof); (6i) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company may declare and make dividend payments in accordance with its dividend policy in an aggregate amount not to exceed $1,000,000 outstanding at 125,000,000 in any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6)fiscal year; and (7j) other so long as no Event of Default exists or would result therefrom the Company may declare and pay additional Restricted Payments, in an unlimited amount if the Consolidated Total Leverage Ratio is less than 3.50 to 1.00 (calculated as of the date of such proposed Restricted Payments in an accordance with the definition of “Pro Forma Compliance” after giving effect to such proposed Restricted Payments). For the avoidance of doubt, the aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1subsection 8.7(j) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the aggregate amount that would otherwise be available for of Restricted Payments that are permitted under clause (3) of paragraph (asubsection 8.7(h). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Credit Agreement (Graphic Packaging Holding Co)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); ) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) warrants, rights or any options, warrants options to purchase or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement shares of any Disqualified Capital Stock class of the Company solely in shares of Qualified such Capital Stock of the Company); ; (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and that is subordinate or junior in right of payment to the Securities or any of its Restricted Subsidiaries), except Guarantee (other than Indebtedness described in any case out clause (7) of the proceeds definition of "Permitted Refinancing Indebtedness"); or or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as “Restricted Payments”a "RESTRICTED PAYMENT"), unless if at the time of and such Restricted Payment or immediately after giving effect to the proposed Restricted Paymentthereto: (Ia) no a Default or an Event of Default shall have occurred and be continuing;; or (IIb) the Company could is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance compliance with Section 4.09(a) hereof4.4; andor (IIIc) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1subsequent to November 28, 2004 2001 (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company whose determination shall not be conclusive) shall exceed the sum (without duplication) of the followingof: (Ai) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned subsequent to November 28, 2001 and on or prior to the date the Restricted Payment is made (the "REFERENCE DATE") (treating such period as a single accounting period); plus (Bii) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value, or as determined in good faith by the Fair Market Value Board of Property Directors of the Company, of property other than cash, cash received after January 1, 2004 by the Company from the issuance or sale any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to any of its Restricted Subsidiaries) of shares November 28, 2001 and on or prior to the Reference Date of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company(other than Excluded Contributions); plus (Ciii) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise without duplication of any optionsamounts included in clause (c)(ii) above, warrants or rights to purchase shares 100% of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds of any equity contribution received by the Company subsequent to November 28, 2001 from a holder of the Company's Capital Stock (other than Excluded Contributions); plus (iv) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange subsequent to November 28, 2001 of any Indebtedness of the Company or any of its Restricted Subsidiaries incurred after January 1November 28, 2004 2001 into or for Qualified Capital Stock; plus (v) without duplication, the sum of: (a) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to November 28, 2001 whether through interest payments, principal payments, dividends or other distributions or payments; (b) the net cash proceeds received by the Company or any Restricted Subsidiary of the Company from the issuance disposition of all or sale any portion of such Investments (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock a Subsidiary of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plusand (Ec) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary (valued in each case as provided in the definition of "Investment"); PROVIDED, HOWEVER, that the sum of clauses (a), (b) and (c) above shall not to exceed in the case of any Unrestricted Subsidiary the total aggregate amount of all such Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its or any Restricted Subsidiaries Subsidiary in such the relevant Person or Unrestricted Subsidiary after January 1subsequent to November 28, 2004.2001. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (b1) Notwithstanding paragraph the payment of any dividend or other distribution within 60 days after the date of declaration of such dividend or other distribution if the dividend or other distribution would have been permitted on the date of declaration; (a2) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) if no Default or Event of Default shall have occurred and be continuing: (1) , the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted SubsidiaryCompany, either (a) solely in exchange forfor shares of Qualified Capital Stock of the Company, or out (b) through the application of the aggregate Net Cash Proceeds of, net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (3) if no Default or Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company that is subordinate or junior in right of payment to the Securities or a Guarantee either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (i) shares of Qualified Capital Stock of the Company, or (ii) Refinancing Indebtedness; (4) if no Default or Event of Default shall have occurred and be continuing, repurchases by the Company or any Restricted Subsidiary of the Company of securities of the Company from employees, directors or consultants of the Company or any Subsidiaries of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such employees, directors or consultants or to the extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreements with such employees or directors of or consultants to the Company or any Subsidiaries of the Company, in an aggregate amount not to exceed $7.5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $15.0 million in any calendar year), provided that the cancellation of Indebtedness owing to the Company or any Restricted Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture; (5) the declaration and payment of dividends to holders of any class or series of Preferred Stock of the Company, provided that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Preferred Stock, after giving effect to such issuance on a pro forma basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4; (6) the payment of dividends on the Company's Common Stock following the first public offering of the Company's Common Stock after the Issue Date, of up to 6% per annum of the net proceeds received by the Company in such public offering (other than public offerings with respect to the Company's Common Stock registered on Form S-8); (7) the repurchase, redemption, repayment, defeasance retirement or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out securities of the aggregate Net Cash Proceeds from, a substantially concurrent issue Company in existence on the Issue Date and sale (other than to a Restricted Subsidiary) from the Persons holding such securities on the Issue Date and which are not held by Apollo or any of shares its Affiliates or members of Qualified Capital Stock management of the Company; Company and its Subsidiaries on the Issue Date (5) including any equity interests issued in respect of any such securities constituting equity interests as a result of a stock split, recapitalization, merger, combination, consolidation or similar transaction); provided, however, that the purchaseCompany shall be permitted to make Restricted Payments under this clause only if after giving effect thereto, redemption, repayment, defeasance or other acquisition or retirement for value the Company would be permitted to incur at least $1.00 of Subordinated additional Indebtedness (other than Disqualified Capital StockPermitted Indebtedness) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesSection 4.4; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) 8) other Restricted Payments in an aggregate amount not to exceed $10,000,00015.0 million; (9) if no Default or Event of Default shall have occurred and be continuing, payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; (10) Investments that are made with Excluded Contributions; (11) any payments made to consummate the Transactions pursuant to or contemplated by the Merger Agreement and any other agreements related to the Recapitalization in effect on the closing date of the Recapitalization, in each case, as such agreements or documents are in effect on the Issue Date as amended from time to time so long as such amendment is in the good faith judgment of the Board of Directors of the Company not more disadvantageous to the Holders of the Securities in any material respect than such agreements or documents as in effect on the Issue Date; (12) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise; (13) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company; (14) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.16 and 4.17; (15) the payment of dividends, other distributions or amounts by the Company to any direct or indirect parents of the Company in amounts required to pay the tax obligations of the Company and its Subsidiaries and the tax obligations of any direct or indirect parents of the Company attributable to the Company and its Subsidiaries; provided that (x) the amount of dividends paid pursuant to this clause (15) to enable any direct or indirect parents of the Company to pay Federal and The actions described state income taxes at any time shall not exceed the amount of such Federal and state income taxes actually owing by any direct or indirect parents of the Company at such time for the respective period and (y) any refunds received by any direct or indirect parents of the Company attributable to the Company and its Subsidiaries shall promptly be returned by such direct or indirect parents to the Company; (16) if no Default or Event of Default shall have occurred and be continuing, payments by the Company of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock of the Company or any Restricted Subsidiary, which in the aggregate do not exceed $3.0 million; and (17) the payment of a Restricted Payment in an aggregate amount of up to $100.0 million to holders of the Company's Capital Stock with the gross proceeds received by the Company from the issuance of the Company's Senior Subordinated Discount Notes Due 2013 having substantially the terms set forth in the preliminary offering circular of the Company, dated May 16, 2003, relating to the issuance of the Company's Senior Subordinated Discount Notes Due 2013. In determining the aggregate amount of Restricted Payments made subsequent to November 28, 2001, in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (32), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5), (6), (7), (8), (9), (14) and (7) of this paragraph (b16) shall be permitted to be taken included in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other such calculation. Not later than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the making any Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers' Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance complies with this Indenture notwithstanding any subsequent adjustments made and setting forth in good faith to reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s 's latest available internal quarterly financial statements affecting Consolidated Net Income of the Company for any periodstatements.

Appears in 1 contract

Samples: First Supplemental Indenture (Salt Holdings Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend ondividend, or make any other distribution to holders ofof any kind or character (whether in cash, property or securities), in respect of any shares class of Capital Stock of the Company or excluding, any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire Qualified Capital Stock of the Company);, (2ii) purchase, redeem or otherwise acquire or retire for value any shares of Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or , any options, warrants or other rights to purchase or acquire such Capital Stock shares or any securities convertible or exchangeable into such shares (other than the purchaseany such shares of Capital Stock, redemptionoptions, acquisition warrants, rights or retirement of any Disqualified Capital Stock of securities that are owned by the Company solely in shares of Qualified Capital Stock of the Companyor a Restricted Subsidiary);, (3iii) make any principal payment on Investment (other than a Permitted Investment) in any Person, other than the Company or a Restricted Subsidiary, or (iv) redeem, defease, repurchase, redeem, defease retire or otherwise acquire or retire for value, prior to its scheduled maturity, repayment or any scheduled principal sinking fund payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out each of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions transactions described in clauses (i) through (iv) above (other than any exception to any such clause) being collectively referred to as “a "Restricted Payments”Payment"); ------------------ if, unless at the time of and after giving effect to the proposed Restricted Payment:thereof: -- (I1) no a Default or an Event of Default shall have occurred and be continuing;continuing at the time of or after giving effect to such Restricted Payment, (II2) immediately after giving effect to such Restricted Payment, the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a) hereof; 4.04(i), and (III3) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after January 1December 31, 2004 shall not exceed 2000 (including any Designation Amount) exceeds the sum (without duplication) of: (i) the amount of (x) the Consolidated Cash Flow of the Company after December 31, 2000, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period) less (y) 150% of the cumulative Consolidated Interest Expense of the Company after December 31, 2000, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period), plus (ii) the aggregate net cash proceeds (other than Excluded Cash Proceeds) received by the Company as a capital contribution in respect of Qualified Stock or from the proceeds of a sale of Qualified Stock made after April 29, 1998 (excluding in each case (x) the proceeds from a sale of Qualified Stock to a Restricted Subsidiary and (y) the proceeds from a sale, other than from a Public Sale, of Qualified Stock the proceeds of which are applied to optionally redeem Notes on or prior to February 1, 2004), plus (iii) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment (other than to the Company or a Restricted Subsidiary) of any Investment made after April 29, 1998 and constituting a Restricted Payment in an amount equal to the lesser of (x) the return of capital with respect to such Investment and (y) the initial amount of such Investment, in either case, less the cost of disposition of such Investment, plus (iv) an amount equal to the consolidated Net Investment on the date of Revocation made by the Company and/or any of the Restricted Subsidiaries in any Subsidiary that has been designated as an Unrestricted Subsidiary after April 29, 1998 upon its redesignation as a Restricted Subsidiary in accordance with Section 4.20, less (v) the amount of all Restricted Payments made by the Company or any of its Restricted Subsidiaries between April 29, 1998 and on or prior to January 1, 2001. For purposes of the preceding clause (ii), the value of the aggregate net cash proceeds received by the Company from, or as a capital contribution in connection with, the issuance of Qualified Stock either upon the conversion of convertible Indebtedness of the Company or any of its Restricted Subsidiaries or in exchange for outstanding Indebtedness of the Company or any of its Restricted Subsidiaries or upon the exercise of options, warrants or rights will be the net cash proceeds received by the Company or any of its Restricted Subsidiaries upon the issuance of such Indebtedness, options, warrants or rights plus the incremental amount received by the Company or any of its Restricted Subsidiaries upon the conversions, exchange or exercise thereof. For purposes of the preceding clause (iv), the value of the consolidated Net Investment on the date of Revocation shall be equal to the Fair Market Value of the aggregate amount of the Company's and/or any Restricted Subsidiary's Investments in such Subsidiary on the applicable date of Designation. For purposes of determining the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its Fair Market Value on the date such Restricted Payment is made by the Company or a Restricted Subsidiary, as the case may be. (b) The foregoing provisions will not prohibit any of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company or distribution within 60 days after the date of declaration thereof, if at such date of declaration date such declaration complied payment would comply with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2ii) so long as no Default or Event of Default shall have occurred and be continuing, the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption redemption, retirement or other acquisition or retirement of any shares of any class of Capital Stock of the Company out of the net cash proceeds of the substantially concurrent capital contribution to the Company in connection with Qualified Stock or any out of the net cash proceeds received by the Company from the substantially concurrent issue or sale (other than to a Restricted Subsidiary) of Qualified Stock; provided that -------- (x) any such net cash proceeds shall be excluded from Section 4.06(a)(3)(ii) and (y) such proceeds, in if from a sale other than a Public Sale, are not applied to optionally redeem Notes on or prior to February 1, 2004; (iii) so long as no Default or Event of Default shall have occurred and be continuing, the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness of the Company made by exchange forfor or conversion into, or out of the aggregate Net Cash Proceeds ofnet cash proceeds received by the Company, or out of a substantially capital contribution to the Company in connection with a concurrent issue and sale (other than to a Restricted Subsidiary) of shares of (a) Qualified Capital Stock (provided that (x) any such net cash proceeds are excluded -------- from Section 4.06(a)(3)(ii) and (y) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Notes on or prior to February 1, 2004) or (b) other Subordinated Indebtedness of the CompanyCompany that has an Average Life equal to or greater than the Average Life of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired; (4iv) so long as no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, repayment, defeasance making of a direct or other acquisition or retirement for value of any Subordinated Indebtedness indirect Investment constituting a Restricted Payment in exchange for, or out an amount not to exceed the amount of the aggregate Net Cash Proceeds from, proceeds of a substantially concurrent capital contribution in respect of Qualified Stock or from the issue and or sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;; provided, however, that (x) any such net cash -------- ------- proceeds are excluded from Section 4.06(a)(3)(ii) and (y) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Notes on or prior to February 1, 2004; or (5v) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as no Default or Event of Default has occurred and is continuing, dividends or distributions by the Company to Triton PCS Holdings, Inc. to be used to repurchase, redeem, acquire or retire for value any Capital Stock of Triton PCS Holdings, Inc. held by any member of management of Triton PCS Holdings, Inc., the Company or any of its Subsidiaries pursuant to any management equity subscription agreement, stock option agreement or other similar agreement; provided, however, that -------- ------- (ax) the principal aggregate amount of such new Indebtedness does dividends or distributions shall not exceed $2.0 million in any twelve-month period, (y) any unused amount in any twelve-month period may be carried forward to one or more future periods and (z) the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount available as of the date of determinationIssue Date under this clause (v) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, shall be equal to $2.0 million plus the amount available as of any premium required to be paid in connection with the Issue Date for such refinancing payments pursuant to the comparable clause of the indenture governing the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is 11% senior subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any notes due 2008. Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, Payments made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4i) and (6v) of this the immediately preceding paragraph (b) shall be included in making the determination of available amounts under Section 4.06(a)(3) and Restricted Payments that shall be permitted made pursuant to be made in accordance with this paragraph (bii), (iii) but shall reduce the amount that would otherwise be available for Restricted Payments under clause and (3iv) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this the immediately preceding paragraph (b) shall reduce not be included in making the amount that would otherwise be determination of available amounts under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (aSection 4.06(a)(3). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Triton PCS Holdings Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any distribution (other distribution than dividends or distributions payable in Qualified Capital Stock of the Company and dividends and distributions payable to holders of, any the Company or another Restricted Subsidiary of the Company) on or in respect of shares of Capital Stock of the Company or any its Restricted Subsidiary (other than dividends or distributions payable solely in shares Subsidiaries to holders of Qualified such Capital Stock of (including any payment in connection with any merger or consolidation involving the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Companyits Restricted Subsidiaries); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of held by the Company solely in shares of Qualified Capital Stock of the Companyor any Restricted Subsidiary); (3) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and or any Guarantor that is subordinate or junior in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessNotes or a Guarantee; or (4) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other each of the foregoing actions described set forth in clauses (i1), (2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless unless, at the time of such Restricted Payment and immediately after giving effect to the proposed Restricted Paymentthereto: (Ii) no Default or an Event of Default shall have occurred and be continuing; (IIii) immediately after giving effect to such transaction on a pro forma basis, the Company could is able to incur at least $1.00 of additional Indebtedness in accordance compliance with Section 4.09(a) hereof4.08(a); and (IIIiii) the aggregate amount of all Restricted Payments declared or (including such proposed Restricted Payment) made after January 1subsequent to the Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall not exceed the sum (without duplication) of the followingof: (A) 50% of the cumulative Consolidated Net Income of the Company accrued on a (or if cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be is a loss, minus 100% of such loss) of the Company earned from the beginning of the fiscal quarter commencing after the Issue Date to the end of the last day of the Company’s most recent fiscal quarter ending prior to the date the Restricted Payment occurs for which financial statements are available (the “Reference Date”) (treating such period as a single accounting period); plus (B) 100% of the aggregate Net Cash Proceeds, or net cash proceeds and the Fair Market Value of Property other than cash, property and marketable securities received after January 1, 2004 by the Company from the issuance or sale any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to any of its Restricted Subsidiaries) of shares the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company or (excluding any options, warrants or rights net proceeds from an Equity Offering to purchase such shares of Qualified Capital Stock of the Companyextent used to redeem Notes pursuant to the provisions described under Section 3.01(b)); plus (C) 100% of the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance of Indebtedness of the Company or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock Subsidiaries that have has been converted into or exchanged for Qualified Capital Stock of the Company, together with Company subsequent to the aggregate cash received by Issue Date and on or prior to the Company at the time of such conversion or exchangeReference Date; plus (ED) the amount for the period subsequent to the extent not otherwise included in Consolidated Net Income, Issue Date and on or prior to the Reference Date equal to the sum of (i) the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company or any of its Restricted Subsidiaries in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any of its Restricted Subsidiaries (and not otherwise included in the calculation of Consolidated Net Income), and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time the Company revokes the designation of such Unrestricted Subsidiary and such Unrestricted Subsidiary becomes a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any of its Restricted Subsidiaries in such Person or Unrestricted Subsidiary after January 1, 2004.Subsidiary; plus (bE) Notwithstanding paragraph 100% of the aggregate net cash proceeds received from the exercise by any holder of a convertible note of the Company that has been converted into Qualified Capital Stock of the Company subsequent to the Issue Date and on or prior to the Reference Date. In the case of clause (aiii)(B) above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or indirectly using funds borrowed from the Company or any Subsidiary of the Company, shall be excluded until and its Restricted Subsidiaries may take to the following actions so long as (extent such borrowing is repaid. Notwithstanding the foregoing, the provisions set forth in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingimmediately preceding paragraph do not prohibit: (1) the payment of any dividend or other distribution or redemption within 60 days after the date of declaration of such dividend or distribution or notice for redemption if such payment would have been permitted under this Indenture on the date of declaration or notice for redemption (assuming, in the case of a redemption payment, the giving of the notice would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time); (2) the acquisition of any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Companysale; (3) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, the repurchase, redemption or other acquisition or retirement of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes and Guarantees either (i) solely in exchange for shares of any class Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) within 60 days after such sale of (a) shares of Qualified Capital Stock of the Company or any Restricted Subsidiary(b) if no Default or Event of Default would exist after giving effect thereto, Refinancing Indebtedness; (4) an Investment either (i) solely in exchange for, or out for shares of Qualified Capital Stock of the aggregate Net Cash Proceeds of, Company or (ii) through the application of the net proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the CompanyCompany within 60 days after such sale; (5) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, the purchase, redemption, repayment, defeasance repurchase or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified shares of Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness Stock of the Company so long as from employees, former employees, directors or former directors of the Company (a) the principal amount or permitted transferees of such new Indebtedness does not exceed the principal amount (oremployees, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereofformer employees, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchaseddirectors or former directors), redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced agreements (including employment agreements) or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, plans (bor amendments thereto) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such repurchases and other acquisitions in any calendar year shall not exceed $5.0 million (with unused amounts in any calendar year being carried over to the next calendar year subject to a maximum (without giving effect to the following additional proviso) of $10.0 million in any calendar year); provided further, however, that such amount in any calendar year may be increased by an aggregate amount not to exceed $1,000,000 outstanding at any one time, the net cash proceeds of which key man life insurance policies received by the Company after the Issue Date (less the amount of any Restricted Payments made since the Issue Date with such net cash proceeds); (6) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other similar rights if such Capital Stock represents a portion of the exercise price of such options, warrants or other similar rights; (7) payments or distributions to dissenting stockholders of Capital Stock of the Company pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company or any of its Restricted Subsidiaries; (8) distribution of rights pursuant to a shareholder rights plan of the Company or redemptions of such rights; provided that such redemptions are used solely in accordance with the terms of such shareholder rights plan; (a9) to purchase common stock any purchase, redemption or acquisition for value of Qualified Capital Stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option the Company’s 401(k) plan or other incentive planEmployee Stock Purchase Plan (as such plans are amended or modified from time to time); (10) any payment of cash in lieu of the issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the conversion or exchange of Capital Stock of any Person (including in a merger, consolidation, amalgamation or similar transaction); (11) the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a principal amount Restricted Subsidiary of the Company, so long as, with respect to any such dividend or distribution payable in respect of any Capital Stock issued by a Restricted Subsidiary that is not a Wholly Owned Subsidiary, the Company or the Restricted Subsidiary holding such Capital Stock receives at least its pro rata share of such dividend or distribution; (12) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, other Restricted Payments not to exceed $50.0 million outstanding at any one time in the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6)aggregate; and (713) other if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, any Restricted Payments, so long as immediately after giving effect to such Restricted Payment on a pro forma basis, the Consolidated Total Net Leverage Ratio of the Company and its Restricted Subsidiaries on a consolidated basis is less than 2.25 to 1.00. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in an aggregate amount not accordance with clause (iii) of the first paragraph of this Section 4.09 amounts expended pursuant to exceed $10,000,000; and The actions described in clauses (1), (32)(ii), (43)(ii)(a), (4)(ii) and (6) of this paragraph (b12) shall be Restricted Payments that shall be permitted to be made included in accordance such calculation. For purposes of determining compliance with this paragraph (b) but shall reduce Section 4.09, if a Restricted Payment meets the amount that would otherwise be available for Restricted Payments under clause (3) criteria of paragraph (a) (provided that any dividend paid pursuant to clause (1) more than one of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions exceptions described in clauses (2), 1) through (5) and (713) of the second paragraph of this paragraph (b) shall be permitted Section 4.09 or is entitled to be taken made pursuant to the first paragraph of this Section 4.09, the Company may, in accordance its sole discretion, classify the Restricted Payment in any manner that complies with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) Section 4.09. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the such Restricted Payment of the asset(s) assets or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the such Restricted Payment. (d) In computing Consolidated Net Income . The amount of any Restricted Payment paid in cash shall be its face amount. Not later than the date of making any Restricted Payment pursuant to the provisions of the first paragraph described under paragraph (a) abovethis Section 4.09 and no less frequently than quarterly in the case of all other Restricted Payments, (1) the Company shall use audited financial statements for deliver to the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company Trustee an Officers’ Certificate stating that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance complies with this Indenture notwithstanding any subsequent adjustments made and setting forth in good faith to reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s latest available quarterly financial statements affecting Consolidated Net Income of statements. The Trustee may assume no Restricted Payments were made if it does not receive an Officers’ Certificate and the Company for any periodTrustee shall have no duty to investigate whether such an Officers’ Certificate should have been delivered.

Appears in 1 contract

Samples: Indenture (Kratos Defense & Security Solutions, Inc.)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate direct or indirect parent or Subsidiary thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company and other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the net cash proceeds of Permitted Refinancing IndebtednessIndebtedness and except a payment of interest or principal at or within one year of the Stated Maturity thereof; or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I1) no Default or Event of Default shall have occurred and be continuing; (II2) the Company could incur $1.00 of additional Indebtedness in accordance with the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof5.09(a); and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 2021 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be is a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, cash received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, cash received after January 1, 2004 the Issue Date by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the Issue Date from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004the Issue Date. (b) Notwithstanding paragraph (aSection 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingwill not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company redemption within 60 days after the date of declaration or giving of redemption notice, as the case may be, thereof, if at said date of declaration or notice such declaration date such declaration payment would have complied with the provisions of paragraph (aSection 4.07(a) above (and such payment shall be deemed to have been paid on such the date of declaration payment for purposes of any calculation required by the provisions of paragraph (a) aboveSection 4.07(a)); (2) the payment of any dividend payable from or distribution by a Restricted Subsidiary to the Company holders of its Equity Interests on a pro rata basis; (3) any Restricted Payment made in exchange for, or any out of the Net Cash Proceeds of the substantially concurrent sale (other Restricted than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Capital Stock), with any such payment being deemed to be “substantially concurrent” if made within 180 days of the sale of the Equity Interests in question; provided that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from Section 4.07(a)(3)(B); (34) the defeasance, redemption, repurchase, retirement or other acquisition of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the Net Cash Proceeds from an incurrence of any Permitted Refinancing Indebtedness permitted to be incurred under Section 4.09; (5) the repurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock Equity Interests of the Company or any Restricted Subsidiary, in exchange for, or out Subsidiary of the aggregate Net Cash Proceeds ofCompany held by any employees, a substantially concurrent issue and sale former employees, directors or former directors of the Company or any of its Restricted Subsidiaries (or heirs, estates or other than permitted transferees of such employees or directors) pursuant to a Restricted Subsidiary) any agreements (including employment agreements), management equity subscription agreements or stock option agreements or plans (or amendments thereto), approved by the Board of shares of Qualified Capital Stock Directors of the Company; (4) , under which such individuals purchase or sell or are granted the repurchase, redemption, repayment, defeasance right to purchase or other acquisition or retirement for value sell shares of any Subordinated Indebtedness in exchange for, or out of Capital Stock; provided that the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement price paid for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of all such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchasedrepurchased, redeemed, repaid, defeased, acquired or retiredretired Equity Interests shall not exceed $10,000,000 in any calendar year, plus the amount of with unused amounts in any premium required calendar year being permitted to be paid carried over to succeeding calendar years subject to a maximum of $20,000,000 in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notescalendar year; (6) loans made to officers, directors or employees made in the ordinary course of business of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 5,000,000 outstanding at any one time; (7) the repurchase of Equity Interests deemed to occur upon the exercise of stock or other equity options to the extent such Equity Interests represent a portion of the exercise price of those stock or other equity options and any repurchase or other acquisition of Equity Interests is made in lieu of or to satisfy withholding taxes in connection with any exercise or exchange of stock options, warrants, incentives or other rights to acquire Equity Interests; (8) upon the occurrence of a Change of Control or an Asset Sale and within 60 days after the completion of the offer to repurchase the Notes under Sections 4.15 or 4.10 (including the purchase of all Notes tendered and required to be purchased), any purchase, repurchase, redemption, defeasance, acquisition or other retirement for value of Subordinated Indebtedness required under the terms thereof as a result of such Change of Control or Asset Sale at a purchase or redemption price not to exceed 101% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon, if any; provided that, in the notice to Holders relating to a Change of Control or Asset Sale hereunder, the proceeds of which are used solely Company shall describe this clause (a8); (9) to the purchase common stock of by the Company of fractional shares arising out of stock dividends, splits or business combinations or conversion of convertible or exchangeable securities of debt or equity issued by the Company; (10) payments to dissenting stockholders (x) pursuant to applicable law or (y) in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a restricted stock consolidation, merger or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, transfer of assets in connection with a principal amount transaction that is not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of prohibited by this clause (6); andIndenture; (711) dividends on Disqualified Capital Stock of the Company or preferred stock of any Restricted Subsidiary if such dividends are included in the calculation of Consolidated Interest Expense; or (i) other Restricted Payments in an aggregate amount not to exceed $10,000,000; 400,000,000 and (ii) so long as, after giving pro forma effect thereto, the Consolidated Total Net Debt to Consolidated EBITDAX Ratio does not exceed 1.50 to 1.00, Restricted Payments in an aggregate amount not to exceed 15.0% of the Consolidated EBITDAX of the Company for the Test Period. (c) The actions described in clauses (1), (3), (4) and (6) of this paragraph (bSection 4.07(b)(1) shall be a Restricted Payments Payment that shall be permitted to be made in accordance with this paragraph (b) Section 4.07(b), but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (aSection 4.07(a)(3) (provided that any dividend paid pursuant to clause (1) of this paragraph (bSection 4.07(b)(1) shall reduce the amount that would otherwise be available under clause (3) of paragraph (aSection 4.07(a)(3) when declared, but not also when subsequently paid pursuant to such clause (1Section 4.07(b)(1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (cd) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above. For purposes of determining compliance with this Section 4.07, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes if a Restricted Payment which, at meets the time criteria of more than one of the making types of such Restricted Payment would Payments described in Section 4.07(b)(1) through (12) or pursuant to Section 4.07(a), the good faith determination of the Company be permitted under the requirements of this IndentureCompany, in its sole discretion, may order and classify, and subsequently reorder and reclassify, such Restricted Payment shall be deemed to have been made in any manner in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 1 contract

Samples: Indenture (Comstock Resources Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders ofon account of any of the Company’s Equity Interests (including, without limitation, any shares of Capital Stock of payment by the Company made in connection with any merger, amalgamation or consolidation involving the Company or any Restricted Subsidiary (of its Subsidiaries), other than dividends or distributions payable solely in shares of Qualified Capital Stock Equity Interests (other than Disqualified Stock) of the Company (excluding, for the avoidance of doubt, any dividends or in options, warrants or other rights to purchase Qualified Capital Stock distributions consisting of Equity Interests of the Company’s Subsidiaries); (2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any Capital Stock of the Company merger, amalgamation or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of consolidation involving the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);its Equity Interests; or (3iii) make any principal payment on or repurchasewith respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, value any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out a payment of interest when due or principal within six months prior to the proceeds of Permitted Refinancing Indebtednessmaturity thereof; or (4iv) make make, and shall not permit any Restricted of its Subsidiaries to directly or indirectly make, any Investment other than a Permitted Investment; , (all such payments or and other actions described set forth in those clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (aThe provisions of Section 4.09(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingnot prohibit: (1i) the payment of any dividend on or the consummation of any Capital Stock of the Company irrevocable redemption within 60 days after the date of declaration thereofof the dividend or giving of the redemption notice, as the case may be, if at such the date of declaration date such declaration or notice, the dividend or redemption payment would have complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above)this Indenture; (2ii) purchases of Equity Interests deemed to occur upon the upon exercise by any employee, director, officer, manager or consultant of the Company of stock options if such Equity Interest represents a portion of the exercise price, and payments in respect of taxes payable upon exercise or vesting thereof; (iii) the payment repurchase of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary shares of the Company; (3) the repurchase’s Equity Interests from any employee, redemption director, officer, manager or other acquisition or retirement of any shares of any class of Capital Stock consultant of the Company or any Restricted Subsidiaryparent entity; provided that, in exchange for, or out such repurchases shall not exceed an aggregate of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale $1,500,000 annually (other than with unused amounts carried over to subsequent years up to a Restricted Subsidiary) maximum of shares of Qualified Capital Stock of the Company$5,000,000 in any calendar year); (4iv) the any repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Equity Interests of the Company or of Subordinated Indebtedness in exchange for, or made out of the aggregate Net Cash Proceeds fromexchange of, or with the net cash proceeds of a substantially concurrent issue and sale issuance of, Equity Interests (other than to Disqualified Stock) or Subordinated Indebtedness with a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the sale being deemed substantially concurrent if such purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness occurs not more than 60 days after such sale; (other than Disqualified Capital Stockv) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount no Default or Event of such new Indebtedness does not exceed the principal amount (orDefault has occurred and is continuing or would occur as a consequence thereof, if such Subordinated Indebtedness being refinanced provides for regular quarterly dividends to holders of Common Stock in an amount less than not exceeding $0.75 per share of Common Stock then outstanding (subject to adjustment for stock splits, recapitalizations or combinations or similar transactions occurring after the principal amount thereof to be due Issue Date) per annum; and (vi) so long as no Default or Event of Default has occurred and payable upon is continuing or would occur as a declaration of acceleration consequence thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid other Restricted Payments in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company cash in an aggregate amount not to exceed $1,000,000 outstanding at any one time, 50.0 million since the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Issue Date. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Sunnova Energy International Inc.)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares on account of the Company's or such Restricted Subsidiary's Capital Stock of the Company or any Restricted Subsidiary other Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company or in options, warrants a Restricted Subsidiary and other than dividends or other rights distributions payable by a Restricted Subsidiary to purchase Qualified Capital Stock of another Restricted Subsidiary or to the Company); ; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock or other Equity Interests of the Company or any Affiliate thereof of its Restricted Subsidiaries (other than any Wholly Owned such Equity Interest purchased from the Company or any Restricted Subsidiary for fair market value (as determined by the Board of Directors in good faith); (iii) voluntarily prepay Subordinated Indebtedness, whether any such Subordinated Indebtedness is outstanding on, or issued after, the date of original issuance of the Company) or any options, warrants or other rights to acquire such Capital Stock Senior Notes except as specifically permitted by the covenants of this Indenture; (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; Investment (all such payments or other actions described in clauses (i) through (iv) above dividends, distributions, purchases, redemptions, acquisitions, retirements, prepayments and Restricted Investments, being collectively referred to as "Restricted Payments"), unless if, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no a Default or Event of Default shall have occurred and be continuing;continuing or shall occur as a consequence thereof, or (IIB) immediately after such Restricted Payment and after giving effect thereto on a Pro Forma basis, the Company could incur shall not be able to issue $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a) hereof; and4.07(a), or (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1the date of original issuance of the Senior Notes, 2004 shall not exceed without duplication, exceeds the sum of (without duplication) of the following: (A1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1(including, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (orfor this purpose, if such Consolidated Net Income shall be a lossgains from Asset Sales and, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, any gain from a sale or disposition of a Restricted Investment) of the Company (or, in case such aggregate is a loss, 100% of such loss) for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing immediately after the date of original issuance of the Senior Notes and ended as of the Company's most recently ended fiscal quarter at the time of such Restricted Payment, plus (2) 100% of the aggregate net reduction cash proceeds and the fair market value of any property or securities (as determined by the Board of Directors in Investments in Unrestricted Subsidiaries resulting good faith) received by the Company from dividends, repayments the issue or sale of loans or advances, Capital Stock or other transfers Equity Interests of assetsthe Company subsequent to the date of original issuance of the Senior Notes (other than (x) Capital Stock or other Equity Interests issued or sold to a Restricted Subsidiary and (y) the issuance or sale of Disqualified Stock), in each case to plus (3) $5,000,000, plus (4) the amount by which the principal amount of and any accrued interest on either (x) Senior Indebtedness of the Company or (y) any Indebtedness of any Restricted Subsidiary is reduced on the Company's consolidated balance sheet upon the conversion or exchange other than by a Restricted Subsidiary after January 1subsequent to the date of original issuance of the Senior Notes of any Indebtedness of the Company or any Restricted Subsidiary (not held by the Company or any Restricted Subsidiary) for Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company or any Restricted Subsidiaries (less the amount of any cash, 2004 from or the fair market value of any Unrestricted other property or securities (as determined by the Board of Directors in good faith), distributed by the Company or any Restricted Subsidiary (to Persons other than the Company or from the redesignation of an Unrestricted any other Restricted Subsidiary) upon such conversion or exchange), plus (5) if any Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary Subsidiary, the value of the deemed Restricted Payment resulting therefrom and determined in accordance with the second sentence of Section 4.16; provided, however, that for purposes of this clause (valued in each case as provided in the definition of “Investment”5), not to exceed in the case value of any Unrestricted redesignated Non-Restricted Subsidiary shall be reduced by the total amount that any such redesignation replenishes or increases the amount of Restricted Investments (other than Permitted Investments) in such Unrestricted Subsidiary permitted to be made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004pursuant to Section 4.05(b)(iii). (b) Notwithstanding paragraph (a) aboveSection 4.05(a), the Company and its following Restricted Subsidiaries Payments may take the following actions so long as be made: (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such said date of declaration such payment would comply with all the provisions hereof (including, but not limited to, this Section 4.05); (ii) making Restricted Investments at any time, and from time to time, in an aggregate outstanding amount of $20,000,000 after the date of original issuance of the Senior Notes (it being understood that if any Restricted Investment after the date of original issuance of the Senior Notes pursuant to this clause (ii) is sold, transferred or otherwise conveyed to any Person other than the Company or a Restricted Subsidiary, the portion of the net cash proceeds or fair market value of securities or properties paid or transferred to the Company and its Restricted Subsidiaries in connection with such sale, transfer or conveyance that relates or corresponds to the repayment or return of the original cost of such a Restricted Investment will replenish or increase the amount of Restricted Investments permitted to be made pursuant to this Section 4.05(b)(ii), so that up to $20,000,000 of Restricted Investments may be outstanding under this Section 4.05(b)(ii) at any given time; provided that any Restricted Investment in a Restricted Subsidiary made pursuant to this clause (ii) is made for purposes fair market value (as determined by the Board of Directors in good faith); (iii) the repurchase, redemption, retirement or acquisition of the Company's stock from the executives, management, employees or consultants of the Company or its Subsidiaries pursuant to the terms of any calculation required subscription, stockholder or other agreement or plan, up to an aggregate amount not to exceed $5,000,000; (iv) any loans, advances, distributions or payments from the Company to its Restricted Subsidiaries, or any loans, advances, distributions or payments by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or to another Restricted Subsidiary, in each case pursuant to intercompany Indebtedness, intercompany management agreements and other intercompany agreements and obligations; (v) investments in marketable securities and other negotiable instruments through the Xxxxxxx Xxxx Funds (including the Xxxxxxx Xxxx Interest Income Fund); (vi) the purchase, redemption, retirement or other acquisition of (A) any Senior Indebtedness of the Company or any Indebtedness of a Restricted Subsidiaries required by its terms to be purchased, redeemed, retired or acquired with the net proceeds from asset sales (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) or upon a change of control (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) and (B) the Senior Notes pursuant to Sections 4.13 and 4.14; (vii) to the extent constituting Restricted Payments, payments under the Tax Sharing Agreement, New Subsidiary Consulting Agreement, Transition Agreement and the JI Properties Services Agreement; (viii) to the extent constituting Restricted Payments, payments under the New Subsidiary Advisory Agreement, provided that such payments will not be made and shall be accrued so long as any Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, and the Company's obligations to pay such fees under the New Subsidiary Advisory Agreement shall be subordinated expressly to the Company's Obligations in respect of the Senior Notes and indemnities, expenses and other amounts under the New Subsidiary Advisory Agreement; (ix) the redemption, repurchase, retirement or the acquisition of any Capital Stock or other Equity Interests of the Company or any Restricted Subsidiary in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company; ) of other Capital Stock or other Equity Interests of the Company or any Restricted Subsidiary (3other than any Disqualified Stock); provided that any net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition, and any Net Income resulting therefrom, shall be excluded from this Section 4.05(a)(iv)(c)(1) and (c)(2); (x) the repurchasedefeasance, redemption or repurchase of pari passu or Subordinated Indebtedness with the net cash proceeds from an issuance of permitted Refinancing Indebtedness or the substantially concurrent sale (other acquisition or retirement than to a Subsidiary of any shares of any class the Company) of Capital Stock or other Equity Interests of the Company or of a Restricted Subsidiary (other than Disqualified Stock); provided that any net cash proceeds that are utilized for any such defeasance, redemption or repurchase, and any Net Income resulting therefrom, shall be excluded from this Section 4.05(a)(iv)(c)(1) and (c)(2); (xi) payments of fees, expenses and indemnities in respect of the Company's and its Subsidiaries' directors and such payments to Parent (and its parent companies) in respect of their directors, provided that the aggregate amount of such fees payable to all such directors does not exceed $250,000 in any fiscal year; (xii) payments in respect of the Junior Seller Notes, (xiii) payments in connection with the Offering; (xiv) payments in respect of the Contingent Earnout Agreement; (xv) Restricted Investments made or received in connection with the sale, transfer or disposition of any business, properties or assets of the Company or any Restricted Subsidiary, provided, that if such sale, transfer or disposition constitutes an Asset Sale, the Company complies with Section 4.14; (xvi) any Restricted Investment constituting securities or instruments of a Person issued in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance for trade or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of claims against such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company Person in connection with a restricted stock financial reorganization or employee stock purchase plan, or to exercise stock options received pursuant to restructuring of such Person; and (xvii) any Restricted Investment constituting an employee or director stock option plan or other incentive plan, equity investment in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Receivables Subsidiary. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Motors & Gears Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate direct or indirect parent or Subsidiary thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company and other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the net cash proceeds of Permitted Refinancing IndebtednessIndebtedness and except a payment of interest or principal at or within one year of the Stated Maturity thereof; or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I1) no Default or Event of Default shall have occurred and be continuing; (II2) the Company could incur $1.00 of additional Indebtedness in accordance with the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof5.09(a); and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 2021 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be is a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, cash received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, cash received after January 1, 2004 the Issue Date by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 the Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the Issue Date from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004the Issue Date. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Comstock Resources Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary of its Subsidiaries to, directly or indirectly, indirectly take any of the following actions: : (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable payable, solely in shares of Qualified the Company's own Capital Stock of the Company or in options(other than Redeemable Capital Stock)), warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem redeem, defease or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock Stock, (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on on, or repurchase, redeem, defease repurchase or defease, or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Indebtedness which is Subordinated Indebtedness Indebtedness, (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment (other than a Permitted Investment; ) in any Person or (v) incur, create or assume any guarantee of Indebtedness of any Affiliate (other than with respect to (a) guarantees of Indebtedness of any Subsidiary by the Company or by any Subsidiary or (b) guarantees of Indebtedness of the Company by any Subsidiary) (such payments or any other actions described in clauses (i) through ), (ii), (iii), (iv) above being collectively referred to as “and (v), collectively, "Restricted Payments”), ") unless at the time of and after giving effect to the proposed Restricted Payment: Payment (Ithe amount of such payment, if other than cash, as determined by the Board of Directors, whose determination will be conclusive if evidenced by a Board Resolution), (1) no Default or Event of Default or event that, after notice or lapse of time or both would become an Event of Default, shall have occurred and or be continuing; , and (II2) the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) pursuant to Section 4.09(a) hereof; and 1008, and (III3) the aggregate amount of all Restricted Payments declared or made after January April 1, 2004 1993 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January April 1, 2004 1993 and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such aggregate Consolidated Net Income shall be a loss, minus 100% of such loss); plus ) plus (B) the aggregate Net Cash Proceedsnet proceeds, including the fair market value of property or the Fair Market Value of Property assets other than cashcash (as determined by the Board of Directors, whose determination will be conclusive if evidenced by a Board Resolution), received after January 1, 2004 by the Company from the issuance issue or sale (other than to any a Subsidiary) after April 1, 1993 of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise Redeemable Capital Stock), or of any options, warrants or other rights to purchase shares of Qualified such Capital Stock of the Company; plus plus (DC) the aggregate Net Cash Proceeds net cash proceeds received after January 1, 2004 by the Company from the issuance issue or sale (other than to a Subsidiary) after April 1, 1993 of any of its Restricted Subsidiaries) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock evidencing Indebtedness of the Company that have thereafter has been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (Eother than Redeemable Capital Stock) plus (D) to the extent not otherwise included in the Consolidated Net IncomeIncome of the Company, an amount equal to the net reduction in Investments (other than reductions in Unrestricted Subsidiaries Permitted Investments) in any Person other than a Subsidiary resulting from the payments in cash of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the date of the Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”)such Person, not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made Person by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Subsidiaries. (b) Notwithstanding None of the provisions set forth in paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as above shall be deemed to prohibit (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the foregoing provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such the date of declaration for purposes of any calculation required by the provisions of paragraph such declaration, (a) above); (2ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchaseredemption, redemption repurchase or other acquisition or retirement of any shares of any class of Capital Stock of the Company or of any Restricted Subsidiary, Subsidiary in exchange for, or out of the aggregate Net Cash Proceeds proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of other shares of Qualified Capital Stock of the Company; , (4iii) so long as no Default or Event of Default shall have occurred and be continuing, payments with respect to the cancellation or repurchase of stock or stock options granted or to be granted to employees of the Company and its Subsidiaries under the Borg-Warner Security Corporation Management Stock Option Plan or txx Xxxx-Xxxner Security Corporation 1993 Stock Option Plan or pursuanx xx xxx Xxrg-Warner Holdings Corporation Management Stock Subscription Agrxxxxxx, xx amended, in each case, in effect on the date of this Indenture, provided that the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 1008 hereof; or (iv) the repurchasepurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, net cash proceeds of (x) a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of of, shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Redeemable Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, Company or (y) a substantially concurrent incurrence (other than to a Restricted Subsidiary) of of, new Subordinated Indebtedness of the Company so long as (aA) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the lesser of the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Subordinated Indebtedness being refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus plus, in either case, the amount of reasonable expenses of the Company incurred in connection with such refinancing, (bB) such new Subordinated Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, retired and (cC) such new Subordinated Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled stated maturity of principal payment that is at least 91 days later than the final Stated Maturity for the final scheduled of principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and . The actions action described in clauses (1), (3), (4ii) and (6iv)(x) of this paragraph (b) shall be a Restricted Payments Payment that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Borg Warner Security Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions:, (1i) declare or pay any dividend on, or any other distribution on any Equity Interests of the Company or any Restricted Subsidiary or make any other payment or distribution to the direct or indirect holders of, any shares of Capital Stock Equity Interests (in their capacity as such) of the Company or any Restricted Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the CompanyEquity Interests); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock Equity Interests of the Company or any Affiliate thereof Restricted Subsidiary (other than any Wholly Owned Restricted Subsidiary of such Equity Interests owned by the Company) Company or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the CompanyRestricted Subsidiary); (3iii) redeem or make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for valueon, prior to any scheduled principal paymentmaturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, any Subordinated Indebtedness (excluding other than any intercompany Subordinated Indebtedness between or among held by the Company and or any of its Restricted SubsidiariesSubsidiary), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; Investment (such payments or other actions described in clauses than Permitted Investments) (i) through any of the foregoing (iv) above being collectively referred to as “Restricted Payments”other than an exception thereto), unless at the time of and after giving effect to the proposed Restricted Payment:a "RESTRICTED PAYMENT"), unless (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or after giving effect to such Restricted Payment; (IIb) immediately after giving effect to such Restricted Payment, the Company could would be able to incur $1.00 of additional Indebtedness in accordance with under Section 4.09(a4.06(a) hereof; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments (including the fair market value of any non-cash Restricted Payment) declared or made on or after January 1the Issue Date (excluding any Restricted Payment described in clauses (ii), 2004 shall not exceed the sum (without duplicationiii), (iv) or (v) of the following:next paragraph) does not exceed an amount equal to the sum of the following (the "BASKET"): (A1) 50% of the Consolidated Net Income (or 100% of Consolidated Net Loss) for the period (treated as one accounting period) commencing on the first day of the Company accrued on a cumulative basis during fiscal quarter in which the period beginning on January 1, 2004 Issue Date occurs and ending on the last day of the Company’s last most recent fiscal quarter ending prior to immediately preceding the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)Payment; plus (B2) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net cash proceeds received after January 1, 2004 by the Company either (x) as capital contributions to the Company after the Issue Date or (y) from the issuance or issue and sale (other than to a Subsidiary of the Company) of Qualified Equity Interests after the Issue Date (other than any issuance and sale of Qualified Equity Interests financed, directly or indirectly, using funds (i) borrowed from the Company or any of its Restricted SubsidiariesSubsidiaries until and to the extent such borrowing is repaid or (ii) contributed, extended, guaranteed or advanced by the Company or any of shares its Subsidiaries (including in respect of Qualified Capital Stock any employee stock ownership or benefit plan)); PLUS (3) the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness) of the Company or any options, warrants Restricted Subsidiary is reduced on the Company's consolidated balance sheet upon the conversion or rights to purchase such shares of Qualified Capital Stock exchange (other than by a Subsidiary of the Company; plus ) subsequent to the Issue Date into Qualified Equity Interests (C) less the aggregate Net Cash Proceedsamount of any cash, or the Fair Market Value fair value of Property other than cashproperty, received after January 1, 2004 distributed by the Company (other than from or any of its Restricted Subsidiaries) Subsidiary upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange); plusPLUS (E4) in the case of the disposition or repayment of any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent not otherwise included in the computation of Consolidated Net Income, ) equal to the net reduction lesser of: (x) the return in Investments in Unrestricted Subsidiaries resulting from dividends, repayments cash of loans or advances, or other transfers capital with respect to such Investment and (y) the amount of assetssuch Investment that was treated as a Restricted Payment, in each case either case, less the cost of the disposition of such Investment and net of taxes; PLUS (5) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with respect to the Company or any Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary after January 1the Issue Date in accordance with Section 4.15 hereof, 2004 from the Company's proportionate interest in an amount equal to the excess of (x) the total assets of such Subsidiary, valued on an aggregate basis at the lesser of book value and fair market value, over (y) the total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any Unrestricted case exceed the Designation Amount with respect to such Restricted Subsidiary or from upon its Designation); MINUS (6) with respect to each Subsidiary of the redesignation of Company which has been designated as an Unrestricted Subsidiary as a Restricted Subsidiary (valued after the Issue Date in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) aboveaccordance with Section 4.15 hereof, the Company greater of (x) $0 and its Restricted Subsidiaries may take (y) the following actions so long Designation Amount thereof (measured as (in of the case Date of clauses (3Designation), (4), (5) and ; PLUS (7) below) no Default or Event of Default shall have occurred and be continuing: $10.0 million. The foregoing provisions will not prevent (1i) the payment of any dividend or distribution on any Capital Stock of the Company Equity Interests within 60 days after the date of declaration thereofof such dividend or distribution, if at the date of such declaration date declaration, such declaration complied dividend or distribution would comply with the provisions of paragraph this Indenture; (aii) above (and such payment shall be deemed to have been paid on such date of declaration for purposes the redemption of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock Equity Interests of the Company or any Restricted Subsidiary, Subsidiary in exchange for, or out of the aggregate Net Cash Proceeds net cash proceeds of the substantially concurrent issue and sale (other than to a Subsidiary of the Company) of, Qualified Equity Interests; (iii) any Investment to the extent that the consideration therefor consists of Qualified Equity Interests; (iv) the redemption of Subordinated Indebtedness made in exchange for, or out of the net cash proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of, (x) Qualified Equity Interests or (y) a Permitted Refinancing of shares of Qualified Capital Stock of the Company; such Subordinated Indebtedness; or (4v) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value redemption of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness Equity Interests of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (orheld by directors, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors officers or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount its Subsidiaries upon their death, retirement or other termination not to exceed $1,000,000 outstanding at 1.0 million in the aggregate in any one timecalendar year; PROVIDED, HOWEVER, that any unused amount may be used in the proceeds next succeeding (but not any subsequent) calendar year; PROVIDED, FURTHER, HOWEVER, that (A) in the case of which are used solely (a) to purchase common stock each of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1ii), (3iii), (4iv) and (6v), no Default shall have occurred and be continuing or would arise therefrom and (B) no issuance of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid Qualified Equity Interests pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2ii), (5iii) and or (7) of this paragraph (biv) shall be permitted to be taken in accordance with this paragraph and shall not reduce increase the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Basket. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Oglebay Norton Co /New/)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of its Capital Stock to holders of such Capital Stock other than the Company or any of its Restricted Subsidiaries; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on on, or repurchasepurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany other than the principal payment on, or the purchase, redemption, defeasance, retirement or other acquisition for value of, (i) Subordinated Indebtedness between made in satisfaction of or among the Company and any anticipation of its Restricted Subsidiaries)satisfying a sinking fund obligation, except in any case out principal installment or final maturity within one year of the proceeds due date of Permitted Refinancing Indebtednesssuch obligation, installment or final maturity and (ii) Indebtedness permitted under Section 4.03(b)(6)); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses Section 4.04(a)(1), (i2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless if at the time of and such Restricted Payment or immediately after giving effect thereto: (A) a Default or an Event of Default shall have occurred and be continuing; (B) the Company is not able to Incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03; or (C) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made after the Issue Date (the amount expended for such purpose, if other than in cash, being the Fair Market Value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of (without duplication): (i) 50 percent of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100 percent of such loss) of the Company earned during the period beginning on the first day of the fiscal quarter commencing on July 1, 2013 and through the end of the most recent fiscal quarter for which financial statements are available prior to the date such Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); plus (ii) the aggregate net cash proceeds or Fair Market Value of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) since the Issue Date as a contribution to its common equity capital or from the issuance and sale of Qualified Capital Stock of the Company or from the issuance of Indebtedness of the Company subsequent to the Issue Date that has been converted into or exchanged for Qualified Capital Stock of the Company on or prior to the Reference Date; plus (iii) an amount equal to the sum of (1) the net reduction in the Investments (other than Permitted Investments, but including Investments in Unrestricted Subsidiaries) made by the Company or any Restricted Subsidiary in any Person after the Issue Date resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds (including the Fair Market Value of property other than cash) realized on the sale of such Investment and proceeds representing the return of capital, in each case received by the Company or any Restricted Subsidiary, (2) the amount of any Guarantee or similar arrangement that has terminated or expired or by which it has been reduced to the extent that it was treated as a Restricted Payment after the Issue Date that reduced the amount available under this Section 4.04(a)(C) or Section 4.04(b)(11) net of any amounts paid by the Company or a Restricted Subsidiary in respect of such Guarantee or similar arrangement; provided, however, that the amounts set forth in subclauses (1) and (2) of this clause (iii) above shall not exceed, in the case of any such Person, the amount of Investments (excluding Permitted Investments) previously made and treated as a Restricted Payment by the Company or any Restricted Subsidiary after the Issue Date that reduced the amount available under this Section 4.04(a)(C) or Section 4.04(b)(11) in such Person or Unrestricted Subsidiary; plus (iv) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Company or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Company) of the Investment of the Company or the Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment). (b) Notwithstanding the foregoing, the provisions set forth in Section 4.04(a) do not prohibit: (I1) the payment of any dividend or the consummation of any redemption within 60 days after the date of declaration of such dividend or giving notice of such redemption, as the case may be, if the dividend or redemption would have been permitted on the date of declaration or notice; (2) a Restricted Payment, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or substantially concurrent cash contribution to the common equity of the Company; (3) so long as no Default or Event of Default shall have occurred and be continuing, repurchases, redemptions or other acquisitions of Capital Stock (or rights or options therefor) of the Company from current or former officers, directors, employees or consultants or their respective estates, spouses, former spouses or family members pursuant to equity ownership or compensation plans or stockholders agreements not to exceed $50.0 million in the aggregate subsequent to the Issue Date; (II4) dividends and distributions paid on Common Stock of a Restricted Subsidiary on a pro rata basis or on a basis more favorable to the Company; (5) any purchase or redemption of Subordinated Indebtedness utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of Sections 4.05 and Section 4.17; (6) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company could incur $1.00 or Disqualified Capital Stock or Preferred Stock of additional Indebtedness any Restricted Subsidiary issued in accordance with Section 4.09(a) hereof4.03; andprovided that such dividends are included in Consolidated Fixed Charges; and payment of any mandatory redemption price or liquidation value of any such Disqualified Capital Stock or Preferred Stock when due in accordance with its terms in effect upon the issuance of such Disqualified Capital Stock or Preferred Stock; (III7) the aggregate amount any purchase, redemption, defeasance, retirement, payment or prepayment of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum principal of Subordinated Indebtedness either (without duplicationi) solely in exchange for shares of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day Qualified Capital Stock of the Company’s last fiscal quarter ending prior to , (ii) through the date application of such proposed Restricted Payment (or, if such Consolidated Net Income shall be net proceeds of a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or substantially concurrent sale for cash (other than to any a Subsidiary of its Restricted Subsidiariesthe Company) of shares of Qualified Capital Stock of the Company or any options(iii) Refinancing Indebtedness; (8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represents all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or rights to purchase such shares upon the conversion or exchange of Qualified Capital Stock of the Company; plus; (C9) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Transaction and the aggregate Net Cash Proceeds, or the Fair Market Value payment and distribution of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plusrelated fees; (D10) the aggregate Net Cash Proceeds received after January 1Restricted Payments if, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of making such conversion or exchange; plus payments, and after giving effect thereto (E) to the extent not otherwise included in Consolidated Net Incomeincluding, without limitation, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Incurrence of loans or advances, or other transfers of assets, in each case any Indebtedness to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”finance such payment), the Total Leverage Ratio would not exceed 3.75 to exceed in 1.00; provided, however, that at the case time of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in each such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1Payment, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: continuing (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6result therefrom); and (711) other Restricted Payments in an aggregate amount not to exceed the greater of (a) $10,000,000; 500.0 million and The actions described (b) 7.5 percent of Total Assets in the aggregate since the Issue Date. (c) In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with Section 4.04(a)(C), amounts expended pursuant to clauses (1), (32)(ii), (47)(ii), (10) and (611) of this paragraph (bSection 4.04(b) shall be Restricted Payments that shall be permitted to be made included in accordance such calculation. (d) For the purposes of determining compliance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause covenant, (1) a Restricted Payment or Permitted Investment need not be permitted solely by reference to one category of this paragraph permitted Restricted Payments (bor any portion thereof) shall reduce or Permitted Investments (or any portion thereof) described in the amount above clauses or the definitions thereof but may be permitted in part under any combination thereof and (2) in the event that would otherwise be available under clause a Restricted Payment (3or any portion thereof) or Permitted Investment (or any portion thereof) meets the criteria of paragraph more than one of the types of Restricted Payments (aor any portion thereof) when declaredor Permitted Investments (or any portion thereof) described in the above clauses or the definitions thereof, but not also when subsequently paid pursuant the Issuer, in its sole discretion, may divide and classify, and from time to time may divide and reclassify (based on circumstances existing at the time of such clause (1)division or reclassification), such Restricted Payment (or any portion thereof) or Permitted Investment (or any portion thereof) if it would have been permitted at the time such Restricted Payment or Permitted Investment was made and at the actions described in clauses (2time of any such reclassification, except that the Issuer may not reclassify any Restricted Payment or Permitted Investment as having been made under Section 4.04(b)(10) if originally made under another clause of Section 4.04(b), (5under Section 4.04(a)(C) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)or as a Permitted Investment. (ce) The amount In connection with any commitment, definitive agreement, declaration, notice, action or similar event relating to the payment or making of all an Investment or Restricted Payments (other than cash) will be Payment, the Fair Market Value Company, the Issuer or applicable Restricted Subsidiary may designate such Investment or Restricted Payment as having occurred on the date of the commitment, definitive agreement, declaration, notice, action or similar event relating thereto (such date, the “Election Date”) if, after giving pro forma effect to such Investment or Restricted Payment and all related transactions in connection therewith and any related pro forma adjustments, the Company, the Issuer or any of the asset(s) its Restricted Subsidiaries would have been permitted to make such Investment or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of Payment on the relevant period for which audited financial statements are available on the date of determination Election Date in compliance with this Indenture, and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment whichany related subsequent actual declaration, at the time of the payment or making of such Investment or Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall will be deemed for all purposes under this Indenture to have been made in on such Election Date, including, without limitation, for purposes of calculating any ratio, compliance with this Indenture notwithstanding any subsequent adjustments test, usage of any baskets hereunder (if applicable) and Consolidated EBITDA and for purposes of determining whether there exists any Default or Event of Default (and all such calculations on and after such Election Date until the termination, expiration, passing, rescission, retraction or rescindment of such commitment, definitive agreement, declaration, notice, action or similar event shall be made on a pro forma basis giving effect thereto and all related transactions in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodconnection therewith).

Appears in 1 contract

Samples: Indenture (Dana Inc)

Limitation on Restricted Payments. (a) The Company shall notwill not make, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actionsmake, any Restricted Payment, unless: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (Ia) no Default or Event of Default shall have occurred and be continuingcontinuing at the time of or immediately after giving effect to such Restricted Payment; (IIb) immediately after giving pro forma effect to such Restricted Payment, the Company could incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) hereof4.10; and (IIIc) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall the Existing Notes Issue Date (excluding Restricted Payments permitted by clause (ix) of the last paragraph under this Section 4.11) does not exceed the sum of (without duplication) of the following:): (A1) 50100% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to Cumulative EBITDA minus 1.4 times the date of such proposed Restricted Payment (or, if such Company’s Cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)Interest Expense; plus (B2) 100% of the aggregate Net Cash ProceedsProceeds and the fair market value of securities or other property received by the Company, or the Fair Market Value of Property other than cash, received after January 1, 2004 by 2001, from (a) the Company from the issuance issue or sale of Capital Stock (other than to any of its Restricted Subsidiaries) of shares of Qualified Disqualified Capital Stock or Capital Stock of the Company or issued to any options, warrants or rights to purchase such shares of Qualified Capital Stock Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus (C3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company net reductions in Investments (other than from reductions in Permitted Investments) in any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries Person resulting from payments of interest on Indebtedness, dividends, repayments of loans loans, partial or advancestotal releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or other transfers from designations of assetsUnrestricted Subsidiaries as Restricted Subsidiaries, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in at the definition of “Investment”)fair market value thereof, not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary previously made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for Person. For purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and determining under this clause (c) such new Indebtedness has an Average Life to Stated Maturity that is longer the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for cash shall be valued at its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved fair market value as determined by the Board of Directors of the Company reasonably and in an aggregate amount not to exceed $1,000,000 outstanding at any one timegood faith. Notwithstanding the foregoing, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment Subsidiaries may pay any dividend or make any distribution to the Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the asset(s) Parent’s Capital Stock, in the case of each such dividend or securities proposed to be transferred or issued distribution by the Company or such any of the Restricted SubsidiarySubsidiaries constituting a Restricted Payment, as the case may be, pursuant to the Restricted Payment. extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (dor any successor provision) In computing Consolidated Net Income under paragraph (a) aboveand that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, (1) with such dividend to be paid or distribution to be made as and when determined by the Company shall use audited financial statements for Parent, whether during or after the portions end of the relevant period for which audited financial statements are available on taxable year; provided, however, that (i) at the date time of, and after giving effect to, any such dividend or distribution, no Event of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and Default under Section 6.01(1), (2) (without giving effect to the Company grace period set forth therein), (6) or (7) shall have occurred and be continuing or would occur as a consequence thereof and the obligations in respect of the notes shall not otherwise have been accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted to rely in good faith on during the financial statements and other financial data derived from the books and records pendency of the Company that are available on the date any single Event of determinationDefault. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements The provisions of this Indenture, such Restricted Payment Section 4.11 shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.not prohibit:

Appears in 1 contract

Samples: Indenture (Lamar Media Corp/De)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary toto take, directly or indirectly, take any of the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire such shares of Qualified Capital Stock of the CompanyStock); (2) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Company or any Affiliate thereof Capital Stock of any of its Affiliates (other than Capital Stock of any Wholly Owned Restricted Subsidiary of the CompanySubsidiary) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3) make any principal payment on on, or repurchase, redeem, defease or otherwise acquire or retire for value, prior to the Stated Maturity of any scheduled principal payment or any sinking fund payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among of the Company and any that is expressly subordinated in right of its Restricted Subsidiaries), except in any case out of payment to the proceeds of Permitted Refinancing IndebtednessNotes; or (4) make any Restricted Investment (other than any Permitted Investment) in any Person; (such payments or other actions described in (but not excluded from) clauses (i1) through (iv4) above being are collectively referred to as "Restricted Payments"), ; unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (IA) no Default or Event of Default shall have occurred and be continuing; , (IIB) the Company could incur at least $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) pursuant to Section 4.09(a) hereof; and 1011 and (IIIC) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the followingof: (Ai) 50(a) 100% of the Consolidated Net Income Operating Cash Flow less 1.5 times Consolidated Interest Expense or (ii) if Consolidated Operating Cash Flow is a negative, minus 100% of the Company accrued such negative amount, in each case on a cumulative basis during for the period beginning on January 1, 2004 the first day of the Company's first fiscal quarter after the Issue Date and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss)Payment; plus (Bii) the aggregate Net Cash Proceeds, or Proceeds and the Fair Market Value of Property other than cashTelecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company after the Issue Date as capital contributions or from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of shares of Qualified Capital Stock of the Company or any (including upon the exercise of options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (Crights) the aggregate Net Cash Proceedsor warrants, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants options or rights to purchase shares of Qualified Capital Stock of the Company; plus (Diii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received after January 1, 2004 by the Company after the Issue Date from the issuance or sale (other than to any of its Restricted SubsidiariesSubsidiary) of Indebtedness debt securities or shares of Disqualified Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Company at the time of such conversion or exchange; plus (Eiv) to the extent not otherwise included in Consolidated Net IncomeOperating Cash Flow, an amount equal to the sum of (a) the net reduction in Investments (other than Permitted Investments) in Unrestricted Subsidiaries any Person (other than a Restricted Subsidiary) resulting from the payment in cash of dividends, repayments of loans or advances, advances or other transfers of assets, in each case to the Company or a any Restricted Subsidiary after January 1, 2004 the Issue Date from such Person and (b) the amount of any Unrestricted Subsidiary or net reduction in Investments resulting from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of "Investment”)") at the time of such redesignation; provided that, not to exceed in the case of any Unrestricted Subsidiary (a) or (b) above, the foregoing sum shall not exceed the total amount of Investments (other than Permitted Investments) previously made in such Person or Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004Subsidiaries. (b) Notwithstanding paragraph (a) above, the Company and its any Restricted Subsidiaries Subsidiary may take the following actions so long as (in the case of with respect to clauses (3), 2) through (4), (5) and (76) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such date of declaration date the payment of such declaration dividend would have complied with the provisions of paragraph (a) above (and such payment shall will be deemed to have been paid on such date of declaration for purposes of any the calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, (x) in exchange for, or out of the aggregate Net Cash Proceeds of, of a substantially concurrent issue issuance and sale (other than to a Restricted Subsidiary) of, shares of Qualified Capital Stock of the Company; (y) that are held by former officers, employees or directors (or their estates or beneficiaries under their estates) of the Company or any of its Subsidiaries; provided that the aggregate amount of such purchase, redemption or other acquisition or retirement for value under this clause (y) will not exceed $250,000 in any given fiscal year; or (z) pursuant to the employment agreement dated August 4, 1997, between the Company and Xxxxxxx Xxxxxx, as amended and as in effect on the Issue Date (and any extensions or renewals thereof); provided that the amount of such purchase, redemption or other acquisition or retirement for value under this clause (z) will not exceed $1,000,000 in any given fiscal year; (3) the purchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of the Company that is expressly subordinated in right of payment to the Notes in exchange for, or out of the Net Cash Proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, shares of Qualified Capital Stock of the Company; (4) the repurchasepurchase of any Indebtedness of the Company that is expressly subordinated in right of payment to the Notes at a purchase price not greater than 101% of the principal amount thereof in the event of a Change of Control in accordance with provisions similar to Section 1010; provided that prior to such purchase the Company has made the Change of Control Offer as provided in such covenant with respect to the Notes and has purchased all Notes validly tendered for payment in connection with such Change of Control Offer; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness (other than Redeemable Capital Stock) of the Company that is expressly subordinated in right of payment to the Notes in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated of, new Indebtedness of the Company that is expressly subordinated in right of payment to the Notes, so long as (aA) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.of

Appears in 1 contract

Samples: Indenture (Pathnet Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless Payment if at the time of such Restricted Payment and immediately after giving effect to the proposed Restricted Paymentthereto: (Ia) no any Default or Event of Default shall have occurred and be continuing;; or (IIb) the Company could is not able to incur $1.00 of additional Indebtedness in accordance with (other than Permitted Indebtedness) under Section 4.09(a) 4.06 hereof; andor (IIIc) the aggregate amount of all Restricted Payments declared or made after January 1subsequent to the Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the fair market value of such property as determined by the Board of Directors of the Company, whose determination shall not exceed be conclusive) exceeds the sum of (without duplication) of the following: (Aa) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period (treated as one accounting period) beginning on January 1, 2004 the last day of the fiscal quarter immediately preceding the Issue Date and ending on the last day of the Company’s last fiscal quarter ending prior to of the Company immediately preceding the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Net Income of the Company for such period shall be a lossdeficit, minus 100% of such loss); plus deficit) plus (Bb) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, net proceeds received after January 1, 2004 by the Company either (1) as capital contributions to the Company after the Issue Date, excluding any capital contributions pursuant to the Tax Sharing Agreement or (2) from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock (including Qualified Capital Stock issued upon the conversion of convertible Indebtedness, in exchange for outstanding Indebtedness or from the Company or any exercise of options, warrants or rights to purchase Qualified Capital Stock) of the Company to any Person (other than to a Restricted Subsidiary of the Company) after the Issue Date plus (c) in the case of the disposition or repayment of any Investment constituting a Restricted Payment made after the Issue Date (excluding any Investment made pursuant to clause (4) of the following paragraph), an amount equal to the lesser of the return of capital with respect to such shares Investment and the cost of such Investment, in either case, less the cost of the disposition of such Investment minus (d) 20% of all cash payments made pursuant to the New Equity Incentive Plan. For purposes of the preceding clause (iii)(b)(2), the value of the aggregate net proceeds received by the Company upon the issuance of Qualified Capital Stock either upon the conversion of the Company; plus (C) the aggregate Net Cash Proceeds, convertible Indebtedness or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) in exchange for outstanding Indebtedness or upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of will be the Company; plus (D) the aggregate Net Cash Proceeds net cash proceeds received after January 1, 2004 by the Company from upon the issuance of such Indebtedness, options, warrants or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of rights plus the Company, together with the aggregate cash incremental amount received by the Company at upon the time of such conversion conversion, exchange or exchange; plus (E) to exercise thereof. Notwithstanding the extent not otherwise included in Consolidated Net Incomeforegoing, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing:these provisions will not (1) the payment of any dividend on or the making of any Capital Stock of the Company distribution within 60 days after the date of its declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to dividend or distribution would have been paid permitted on such the date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); declaration; (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchasepurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiarywarrants, options or other rights to acquire shares of any class of such Capital Stock either (x) solely in exchange forfor shares of Qualified Capital Stock (including any such exchange pursuant to a conversion right or privilege in connection with which cash paid in lieu of fractional shares or scrip), or out (y) through the application of the aggregate Net Cash Proceeds of, net cash proceeds of a substantially concurrent issue and sale (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock or warrants, options or other rights to acquire Qualified Capital Stock; (3) the acquisition of Indebtedness of the Company; Company that is subordinate or junior in right of payment to the Securities either (4x) the repurchasesolely in exchange for shares of Qualified Capital Stock (or warrants, redemption, repayment, defeasance options or other acquisition rights to acquire Qualified Capital Stock) or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds fromCompany that is subordinate or junior in right of payment to the Securities, at least to the extent that the Indebtedness being acquired is subordinated to the Securities and has a Weighted Average Life to Maturity no less than that of the Indebtedness being acquired or (y) through the application of the net cash proceeds of a substantially concurrent issue and sale for cash (other than to a Restricted SubsidiarySubsidiary of the Company) of shares of Qualified Capital Stock of the Company; (5) the purchaseor warrants, redemption, repayment, defeasance options or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified rights to acquire Qualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) which is subordinate or junior in right of payment to the principal amount of such new Indebtedness does not exceed Securities, at least to the principal amount (or, if such Subordinated extent that the Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, Securities and (c) such new Indebtedness has an a Weighted Average Life to Stated Maturity no less than that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has being refinanced; (4) payments by the Company to Lancer pursuant to the Tax Sharing Agreement; (5) Investments constituting Restricted Payments made as a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment result of the Notes; receipt of non-cash consideration from any Asset Sale; and (6) loans made to officers, directors guarantees in respect of Indebtedness incurred by officers or employees of the Company or any Restricted Subsidiary approved by in the Board ordinary course of Directors of the Company business and payments in discharge thereof in an aggregate amount not to exceed $1,000,000 outstanding at 500,000 in any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)fiscal year. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Fairfield Manufacturing Co Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders on or in respect of, any shares of its Capital Stock of (including any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary (other than Company), except dividends or distributions payable solely in shares of Qualified its Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase Qualified such Capital Stock of and except dividends or distributions payable solely to the Company); Company , (2ii) purchase, redeem redeem, retire or otherwise acquire or retire for value any Capital Stock of the Company held by Persons other than the Company in excess of $3,000,000 or (iii) make any Affiliate thereof Investment (other than a Permitted Investment) in any Wholly Owned Restricted Subsidiary of the Company) or Person (any optionssuch dividend, warrants or other rights to acquire such Capital Stock (other than the distribution, purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeemdefeasance, defease other acquisition, retirement or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above Investment being collectively herein referred to as a "Restricted Payments”Payment"), unless if at the time of and after giving effect to the proposed Restricted Payment: (I1) a Default or Event of Default shall have occurred and be continuing (or would result therefrom); or (2) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by the Board of Directors, whose determination shall be evidenced by a Board Resolution furnished to the Trustee) declared or made since the Issue Date, would exceed, without duplication, the sum of: (A) the aggregate Net Cash Proceeds received by the Company from the issue or sale of its Capital Stock, including Capital Stock of the Company issued upon conversion of convertible debt or the exercise of options, warrants or rights to purchase Capital Stock of the Company, but excluding Disqualified Stock, subsequent to the Issue Date (other than an issuance or sale to (i) an employee stock ownership plan or other trust established by the Company or (ii) management employees); and (B) the amount by which Indebtedness of the Company is reduced on the Company's balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash or other property distributed by the Company upon such conversion or exchange). (b) The provisions of Section 4.3(a) shall not prohibit: (i) any purchase or redemption of Capital Stock of the Company made in exchange for, or out of the proceeds of a substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than an employee stock ownership plan or other trust established by the Company) or out of proceeds of an equity contribution made substantially concurrently with such purchase or redemption; provided, however, that (A) such purchase or redemption shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall be excluded from the calculation of amounts under Section 4.3(a)(2)(A); (ii) any payment in cash in lieu of the issuance of fractional shares of Capital Stock to any Holder of Capital Stock warrants of the Company outstanding on the Issue Date pursuant to the exchange of such warrants for other Capital Stock of the Company upon the exercise of such warrants pursuant to the terms thereof; provided, however, that such payment shall be excluded in the calculation of the amount of Restricted Payments; (iii) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with Section 4.3(a); provided, however, that at the time of payment of such dividend, no other Default shall have occurred and be continuing (or result therefrom); provided, further, however, that such dividend shall be included in the calculation of the amount of Restricted Payments from and after the date of declaration of such dividend; or (iv) so long as no Default or Event of Default shall have occurred and be continuing; (II) continuing or would occur as a consequence thereof, the Company could incur $1.00 redemption or repurchase of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together options in respect thereof or related rights pursuant to and in accordance with the aggregate cash received by repurchase provisions of any employee stock option or any stock purchase or other agreement between the Company at and any of its management employees; provided, however, that such redemptions or repurchases pursuant to this Section 4.3(b)(iv) from and after the time Issue Date shall not in the aggregate exceed $3,000,000, plus the amount of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the any net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case cash proceeds to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class sales of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant management employees subsequent to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a)Issue Date. (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Pawnmart Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiary Subsidiaries, including the Issuer, to, directly or indirectly, take the following actions:, (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in optionsany Restricted Subsidiary or dividends or distributions payable to the Company or the Issuer or any Wholly Owned Restricted Subsidiary of the Company or the Issuer or warrants, warrants rights or other rights options to purchase acquire Qualified Capital Stock of the CompanyCompany or any Restricted Subsidiary);, (2ii) purchase, redeem or otherwise acquire or retire for value any such shares of Capital Stock of the Company or any Affiliate thereof (other than any Capital Stock owned by the Company or any of its Wholly Owned Restricted Subsidiary of the Company) Subsidiaries), or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);Stock, (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries)Indebtedness, except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; , (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as a "Restricted Payments”Payment"), unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment: , if other than cash, shall be the amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (I1) no Default or Event of Default shall have occurred and be continuing; , (II2) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance with Section 4.09(a) hereof; and 4.12(a), and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 the Issue Date shall not exceed the sum (without duplication) of the following: (A) 50% of the Adjusted Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 commencing with the first full quarter after the Issue Date and ending on the last day of the Company’s 's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, or if such Adjusted Consolidated Net Income shall be is a loss, minus 100% of such loss); , plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Issue Date by the Company or the Issuer from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or the Issuer or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; Company or the Issuer, plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, Proceeds received after January 1, 2004 the Issue Date by the Company or the Issuer (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; Company or the Issuer, plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 the Issue Date by the Company or the Issuer from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the CompanyCompany or the Issuer, together with the aggregate cash received by the Company or the Issuer at the time of such conversion or exchange; plus, minus (E) to the extent amount of any write-downs, writeoffs, other negative revaluations, and other negative extraordinary charges not otherwise included reflected in Adjusted Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Income of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in during such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004period. (b) Notwithstanding the foregoing paragraph (a) aboveof this Section 4.10, the Company and its Restricted Subsidiaries Subsidiaries, including the Issuer, may take the following actions so long as (in the case of clauses (2), (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company or any Restricted Subsidiary within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) aboveSection 4.10(a); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds offrom, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the CompanyCompany or the Issuer; (43) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of (i) Subordinated Indebtedness (provided such Indebtedness is on terms no less favorable to the Holders of the Notes than the terms of the Subordinated Indebtedness being redeemed) or (ii) shares of Qualified Capital Stock of the CompanyCompany or the Issuer; (4) the repurchase, redemption or other acquisition of any Capital Stock of any Affiliate organized as a limited partnership in which the Company or the Issuer is a general partner pursuant to a redemption which is mandatory under the terms of such partnership's limited partnership agreement; (5) the purchase, redemption, repayment, defeasance repurchase or other acquisition of any Capital Stock of any Restricted Subsidiary, whether in one or retirement for value a series of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange forsubstantially contemporaneous transactions, or out which causes such Person to become a Wholly Owned Restricted Subsidiary of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesCompany; (6) loans made to officers, directors the payment on behalf of any Subsidiary or employees Affiliate of its allocated pro rata costs associated with the issuance of the Company or Notes and any Restricted Subsidiary approved Investment in Capital Stock of such Person taken by the Board of Directors of the Company in an aggregate amount not payment thereof; (7) the distribution or dividend by the Company to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock its stockholders of the Company in connection with a restricted stock or employee stock purchase planshares of Capital Stock of Red Oak directly owned by the Company, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed provided at the exercise price time of such stock options, distribution or dividend (band after giving effect thereto): (i) the Consolidated Fixed Charge Coverage Ratio for the Company's Reference Period for which internal financial statements are available immediately preceding the date of such distribution would have been at least 3.0 to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6)1.0; and (7ii) other the Company's Adjusted Consolidated Net Tangible Assets are equal to or greater than 200% of the consolidated Indebtedness of the Company and its Restricted Payments in an aggregate amount not to exceed $10,000,000; and Subsidiaries. (c) The actions described in clauses clause (1), (3), (4) and (6) of this paragraph (bSection 4.10(b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (bSection 4.10(b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (Section 4.10(a), provided that any dividend paid pursuant to clause (1) of this paragraph (bSection 4.10(b) shall reduce the amount that would otherwise be available under clause (3) of paragraph Section 4.10 (a) when declared, but not also when subsequently paid pursuant to such clause (1)) of Section 4.10(b), and the actions described in clauses provided that any Net Proceeds received under clause (2), ) or (5) and (73)(ii) of this paragraph (bSection 4.10(b) shall not be permitted to be taken included in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under subclauses (B) or (C) of clause (3) of paragraph (aSection 4.10(a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Southwest Royalties Holdings Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiary Subsidiaries to, directly or indirectly, take any of the following actions:actions (each, a “Restricted Payment”): (1i) declare or pay any dividend on, or return of capital or make any other distribution to holders of, any on or in respect of shares of Capital Stock of the Company or any Restricted Subsidiary to holders of such Capital Stock, other than: (other than 1) dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company; (2) dividends or distributions payable to the Company and/or a Restricted Subsidiary; or (3) dividends, distributions or returns of capital made on a pro rata basis to the Company and its Restricted Subsidiaries, on the one hand, and minority holders of Capital Stock of a Restricted Subsidiary, on the other hand (or on a less than pro rata basis to any minority holder); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (held by Persons other than the purchase, redemption, acquisition Company or retirement any of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)its Restricted Subsidiaries; (3iii) make any principal payment on or repurchaseon, purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value, prior to any scheduled principal paymentfinal maturity, scheduled repayment or scheduled sinking fund payment or maturitypayment, as the case may be, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted InvestmentInvestment (other than Permitted Investments); (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless if at the time of the Restricted Payment and immediately after giving pro forma effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the followingthereto: (A) 50% a Default or an Event of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 Default has occurred and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plusis continuing; (B) the Company is not able to Incur at least U.S.$1.00 of additional Indebtedness pursuant to Section 3.9(a); or (C) the aggregate Net Cash Proceedsamount (the amount expended for these purposes, or if other than in cash, being the Fair Market Value of Property the relevant property) of the proposed Restricted Payment and all other than cash, received after Restricted Payments made subsequent to the Issue Date up to the date thereof will exceed the sum of: (1) 100% of Consolidated Adjusted EBITDA of the Company from January 1, 2004 2017 to the end of the most recent fiscal quarter for which consolidated financial information for the Company is available; less (2) 150% of Consolidated Interest Expense of the Company from January 1, 2017 to the end of the most recent fiscal quarter for which consolidated financial information for the Company is available. (b) Notwithstanding Section 3.10(a), this Section 3.10 does not prohibit: (i) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration pursuant to Section 3.10(a); (ii) the acquisition of any shares of Capital Stock of the Company, (1) in exchange for Qualified Capital Stock of the Company; or (2) through the application of the net cash proceeds received by the Company from the issuance or a substantially concurrent sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights a contribution to purchase such shares of Qualified Capital Stock the equity capital of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of not representing an interest in Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assetsStock, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable received from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3iii) the repurchasevoluntary prepayment, purchase, defeasance, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness solely in exchange for, or out through the application of the aggregate Net Cash Proceeds from, net cash proceeds of a substantially concurrent issue and sale (sale, other than to a Subsidiary of the Company, of: (1) Qualified Capital Stock of the Company; or (2) Refinancing Indebtedness for such Subordinated Indebtedness; (iv) repurchases by the Company of Capital Stock of the Company or options, warrants or other securities exercisable or convertible into Capital Stock of the Company from employees or directors of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability or termination of employment or directorship of the employees or directors; (v) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount thereof in the event of a change of control pursuant to a provision no more favorable to the holders thereof than Section 3.7 hereof; provided that, prior to the repurchase the Company has made an Offer to Purchase and repurchased all Notes issued under this Indenture that were validly tendered for payment in connection with such offer to purchase; (vi) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represent all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Subsidiary) Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of Qualified options or warrants or upon the conversion or exchange of Capital Stock of the Company; (5vii) if no Default or Event of Default has occurred and is continuing, the purchase, redemption, repayment, defeasance or other acquisition or retirement for value declaration and payment of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than dividends to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount holders of any premium required to be paid in connection with such refinancing pursuant to the terms class or series of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees Disqualified Stock of the Company or any Restricted Subsidiary approved by or Preferred Stock of any Restricted Subsidiary issued in accordance with Section 3.9 to the Board extent such payment of Directors any redemption price or liquidation value of the Company any such Disqualified Stock or Preferred Stock is made when due in accordance with its terms; (viii) [Reserved] (ix) if no Default or Event of Default has occurred and is continuing or would exist after giving pro forma effect thereto, Restricted Payments in an aggregate amount not to exceed $1,000,000 outstanding at any one timewhich, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, when taken together with accrued interest thereon, all Restricted Payments made pursuant to item (a) of this clause (6ix), does not exceed U.S.$35,000,000 (or the equivalent in other currencies); and (7x) if no Default or Event of Default has occurred and is continuing or would exist after giving pro forma effect thereto, any other Restricted Payments in an Payment, provided that the Net Debt to EBITDA Ratio is less than 2.5 to 1.0 at the time such Restricted Payment is made and after giving pro forma effect thereto. In determining the aggregate amount not of Restricted Payments made subsequent to exceed $10,000,000; the Issue Date, amounts expended pursuant to Section 3.10(b)(i) (without duplication for the declaration of the relevant dividend) and The actions described Section 3.10(b)(iv) will be included in clauses (1such calculation and amounts expended pursuant to Section 3.10(b)(ii), (3Section 3.10(b)(iii), (4Section 3.10(b)(v), Section 3.10(b)(vi), Section 3.10(b)(vii), Section 3.10(b)(ix) and (6Section 3.10(b)(x) of this paragraph (b) shall will not be Restricted Payments that shall be permitted to be made included in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) calculation. The amount of all any Restricted Payments (other than cash) not in cash will be the Fair Market Value on the date of the such Restricted Payment of the asset(s) property, assets or securities proposed to be paid, transferred or issued by the Company or such the relevant Restricted Subsidiary, as the case may be, pursuant to the such Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Arcos Dorados Holdings Inc.)

Limitation on Restricted Payments. (a) The Company shall notnot make, and shall not permit any Restricted Subsidiary toto make, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless Payment if at the time of of, and after giving effect to to, the proposed Restricted Payment:, (Ia) no a Default or Event of Default shall have occurred and be continuing;, (IIb) the Company could incur not Incur at least $1.00 of additional Indebtedness in accordance with Debt pursuant to clause (1) of the first paragraph of Section 4.09(a) hereof; and4.04, or (IIIc) the aggregate amount of that Restricted Payment and all other Restricted Payments (other than Restricted Payments during a Suspension Period and Restricted Payments made pursuant to clauses (c) through (m) of the following paragraph) declared or made after January 1the Issue Date (the amount of any Restricted Payment, 2004 shall not if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the sum (without duplication) of Available Amount. Notwithstanding the followingforegoing limitation, the Company may: (Aa) 50% pay dividends on its Equity Interests within 60 days of the Consolidated Net Income of declaration thereof if, on said declaration date, the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plusdividends could have been paid in compliance with this Indenture; (Bb) the aggregate Net Cash Proceedspurchase, repurchase, redeem, legally defease, acquire or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock retire for value Equity Interests of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, Subordinated Obligations in exchange for, or out of the aggregate Net Cash Proceeds proceeds of the substantially concurrent sale of, a substantially concurrent issue and sale Equity Interests of the Company (other than Disqualified Equity Interests and other than Equity Interests issued or sold to a Restricted Subsidiary) of shares of Qualified Capital Stock Subsidiary of the CompanyCompany or an employee stock ownership plan or trust established by the Company or any Subsidiary for the benefit of their employees); (4c) the purchase, repurchase, redemptionredeem, repaymentlegally defease, defeasance acquire or other acquisition or retirement retire for value of any Subordinated Indebtedness Obligations in exchange for, or out of the aggregate Net Cash Proceeds from, a proceeds of the substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Companyof, Permitted Refinancing Debt; (5d) the (i) purchase, redemptionrepurchase, repaymentredeem, defeasance legally defease, acquire or other acquisition or retirement retire for value of Subordinated Indebtedness (other than any Disqualified Capital Stock) Equity Interests in exchange for, or out of the aggregate net cash proceeds of the substantially concurrent sale of, Permitted Refinancing Debt or (ii) pay scheduled dividends (not constituting a substantially concurrent incurrence (other than to a Restricted Subsidiaryreturn on capital) of Subordinated Indebtedness on Disqualified Equity Interests of the Company issued pursuant to and in compliance with Section 4.04; (e) permit a Restricted Subsidiary that is not a Wholly Owned Subsidiary to pay dividends to shareholders of that Restricted Subsidiary that are not the parent of that Restricted Subsidiary, so long as the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary receives dividends on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis; (ai) the principal amount make cash payments in lieu of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid fractional shares in connection with such refinancing pursuant to the terms exercise of warrants, options or other securities convertible into Equity Interests of the Indebtedness refinanced Company, (ii) purchase fractional shares arising out of stock dividends, stock splits, stock combinations or business combinations or (iii) the amount repurchase or redemption of any premium reasonably determined by the Company as necessary rights to accomplish such refinancing, plus the amount of expenses purchase Equity Interests of the Company incurred issued in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity any future shareholder rights plan of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the NotesCompany; (6g) loans made make repurchases of shares of common stock or other Equity Interests of the Company deemed to occur (A) upon the exercise, conversion or exchange of options, warrants or other rights to purchase Equity Interests of the Company if such Equity Interests of the Company represent a portion of the exercise price thereof, (B) as a result of such shares of common stock or other Equity Interests being utilized to satisfy tax withholding obligations upon (i) the exercise of options, warrants or other rights to purchase Equity Interests of the Company or (ii) the vesting of other Equity Interests of the Company or the withholding taxes applicable to such options, warrants or other rights to purchase Equity Interests of the Company or (C) upon the cancellation of Equity Interests of the Company; (h) repurchase Equity Interests of the Company from current or former officers, directors or employees of the Company or any Restricted Subsidiary of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (including employment agreements) or plans approved by the Board of Directors under which such individuals acquire such Equity Interests; provided, however, that the aggregate amount of such repurchases shall not exceed the sum of (i) $15.0 million in any calendar year (with unused amounts in any calendar year carried over to succeeding calendar years subject to a maximum of $35.0 million in any calendar year) plus (ii) the net cash proceeds of any “key man” life insurance policies of the Company or any Restricted Subsidiary that have not been used to make any repurchases under this clause (h); (i) purchase, defease or otherwise acquire or retire for value any Subordinated Obligations upon a Change of Control of the Company or an Asset Sale by the Company, to the extent required by any agreement pursuant to which such Subordinated Obligations were issued, but only if the Company has previously made the offer to purchase notes required under Section 4.12 or Section 4.07; (j) make other Restricted Payments in an aggregate amount not to exceed the greater of (x) $1,000,000 outstanding 200.0 million and (y) 9.0% of Consolidated Total Assets (calculated as of the last day of the fiscal quarter most recently ended prior to the time of the applicable Restricted Payment for which internal financial statements are available at any one such time); (k) make other Restricted Payments, provided that after giving effect to such Restricted Payment on a Pro Forma Basis the Consolidated Net Leverage Ratio will be less than or equal to 3.75 to 1.00; (l) make other Restricted Payments using the proceeds of which are used solely a substantially concurrent offering of Equity Interests (aother than Disqualified Equity Interests) to purchase common stock of the Company Company; provided that such proceeds shall not be included in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6)Available Amount; and (7m) other make payments under the Transaction Agreements; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clause (j) or (k), no Event of Default shall have occurred and be continuing or would occur as a consequence thereof. For purposes of determining compliance with this Section 4.05, a Restricted Payment permitted by this Section 4.05 or a Permitted Investment described in the definition of “Permitted Investments” need not be permitted solely by reference to one category of permitted Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions or Permitted Investments described in clauses the definition of “Permitted Investments” (1), (3), (4or any portion thereof) and (6) but may be permitted in part under any combination thereof. For purposes of this paragraph Section 4.05, if any Restricted Payment or Investment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Company may classify such Restricted Payment or Investment in any manner that complies with this Section 4.05 and may later reclassify any such Restricted Payment or Investment so long as such Restricted Payment or Investment (bas so reclassified) shall be Restricted Payments that shall would be permitted to be made in accordance with this paragraph (b) but shall reduce reliance on the amount that would otherwise be available for Restricted Payments under clause (3) applicable exception as of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Paymentreclassification. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Lamb Weston Holdings, Inc.)

Limitation on Restricted Payments. (a) The Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company)) on or in respect of shares of its Capital Stock to holders of such Capital Stock other than the Company or any of its Restricted Subsidiaries; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on on, or repurchasepurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany other than the principal payment on, or the purchase, redemption, defeasance, retirement or other acquisition for value of, (i) Subordinated Indebtedness between made in satisfaction of or among the Company and any anticipation of its Restricted Subsidiaries)satisfying a sinking fund obligation, except in any case out principal installment or final maturity within one year of the proceeds due date of Permitted Refinancing Indebtednesssuch obligation, installment or final maturity) and (ii) Indebtedness permitted under Section 4.03(b)(6); or (4) make any Restricted Investment; Investment (such payments or other than Permitted Investments) (each of the foregoing actions described set forth in clauses Section 4.04(a)(1), (i2), (3) through and (iv4) above being collectively referred to as a “Restricted PaymentsPayment”), unless if at the time of and such Restricted Payment or immediately after giving effect thereto: (A) a Default or an Event of Default shall have occurred and be continuing; (B) the Company is not able to Incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03; or (C) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made after the Issue Date (the amount expended for such purpose, if other than in cash, being the Fair Market Value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of (without duplication): (i) 50 percent of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100 percent of such loss) of the Company earned during the period beginning on the first day of the fiscal quarter commencing on July 1, 2013 and through the end of the most recent fiscal quarter for which financial statements are available prior to the date such Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); plus (ii) the aggregate net cash proceeds or Fair Market Value of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) since the Issue Date as a contribution to its common equity capital or from the issuance and sale of Qualified Capital Stock of the Company or from the issuance of Indebtedness of the Company subsequent to the Issue Date that has been converted into or exchanged for Qualified Capital Stock of the Company on or prior to the Reference Date; plus (iii) an amount equal to the sum of (1) the net reduction in the Investments (other than Permitted Investments but including Investments in Unrestricted Subsidiaries) made by the Company or any Restricted Subsidiary in any Person after the Issue Date resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds (including the Fair Market Value of property other than cash) realized on the sale of such Investment and proceeds representing the return of capital, in each case received by the Company or any Restricted Subsidiary, (2) the amount of any Guarantee or similar arrangement that has terminated or expired or by which it has been reduced to the extent that it was treated as a Restricted Payment after the Issue Date that reduced the amount available under this Section 4.04(a)(4)(C) or Section 4.04(b)(11) net of any amounts paid by the Company or a Restricted Subsidiary in respect of such Guarantee or similar arrangement; provided, however, that the amounts set forth in subclauses (1) and (2) of this clause (iii) above shall not exceed, in the case of any such Person, the amount of Investments (excluding Permitted Investments) previously made and treated as a Restricted Payment by the Company or any Restricted Subsidiary after the Issue Date that reduced the amount available under this Section 4.04(a)(4)(C) or Section 4.04(b)(11) in such Person or Unrestricted Subsidiary; plus (iv) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Company or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Company) of the Investment of the Company or the Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment). (b) Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (I1) the payment of any dividend or the consummation of any redemption within 60 days after the date of declaration of such dividend or giving notice of such redemption, as the case may be, if the dividend or redemption would have been permitted on the date of declaration or notice; (2) a Restricted Payment, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or substantially concurrent cash contribution to the common equity of the Company; (3) so long as no Default or Event of Default shall have occurred and be continuing, repurchases, redemptions or other acquisitions of Capital Stock (or rights or options therefor) of the Company from current or former officers, directors, employees or consultants or their respective estates, spouses, former spouses or family members pursuant to equity ownership or compensation plans or stockholders agreements not to exceed $50.0 million in the aggregate subsequent to the Issue Date; (II4) dividends and distributions paid on Common Stock of a Restricted Subsidiary on a pro rata basis or on a basis more favorable to the Company; (5) any purchase or redemption of Subordinated Indebtedness utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of Sections 4.05 and Section 4.17; (6) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company could incur $1.00 or Disqualified Capital Stock or Preferred Stock of additional Indebtedness any Restricted Subsidiary issued in accordance with Section 4.09(a) hereof4.03; andprovided that such dividends are included in Consolidated Fixed Charges; and payment of any mandatory redemption price or liquidation value of any such Disqualified Capital Stock or Preferred Stock when due in accordance with its terms in effect upon the issuance of such Disqualified Capital Stock or Preferred Stock; (III7) the aggregate amount any purchase, redemption, defeasance, retirement, payment or prepayment of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum principal of Subordinated Indebtedness either (without duplicationi) solely in exchange for shares of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day Qualified Capital Stock of the Company’s last fiscal quarter ending prior to , (ii) through the date application of such proposed Restricted Payment (or, if such Consolidated Net Income shall be net proceeds of a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or substantially concurrent sale for cash (other than to any a Subsidiary of its Restricted Subsidiariesthe Company) of shares of Qualified Capital Stock of the Company or any options(iii) Refinancing Indebtedness; (8) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represents all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or rights to purchase such shares upon the conversion or exchange of Qualified Capital Stock of the Company; plus; (C9) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Transaction and the aggregate Net Cash Proceeds, or the Fair Market Value payment and distribution of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plusrelated fees; (D10) the aggregate Net Cash Proceeds received after January 1Restricted Payments if, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of making such conversion or exchange; plus payments, and after giving effect thereto (E) to the extent not otherwise included in Consolidated Net Incomeincluding, without limitation, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments Incurrence of loans or advances, or other transfers of assets, in each case any Indebtedness to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”finance such payment), the Total Leverage Ratio would not exceed 3.75 to exceed in 1.00; provided, however, that at the case time of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in each such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1Payment, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: continuing (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6result therefrom); and (711) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) the greater of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph $500.0 million and (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Dana Inc)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1) declare Declare or pay any dividend on, or make any other distribution to holders payment on account of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants set apart assets for a sinking or other rights to purchase Qualified Capital Stock of the Company); (2) purchaseanalogous fund for, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3) make any principal payment on or repurchasedefeasance, redeemretirement, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4) make any Restricted Investment; (such payments or other actions described in clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I) no Default or Event of Default shall have occurred and be continuing; (II) the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption termination or other acquisition or retirement of of, any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange forwhether now or hereafter outstanding, or out make any other distribution in respect thereof, in each case either directly or indirectly, whether in cash or property or in obligations of the aggregate Net Cash Proceeds ofCompany or any Restricted Subsidiary (collectively, “Restricted Payments”), except that: (a) (i) any Restricted Subsidiary may make Restricted Payments to the Company or any Subsidiary Guarantor and (ii) any Restricted Subsidiary that is not a substantially concurrent issue and sale (Subsidiary Guarantor may make Restricted Payments to any other than to a Restricted Subsidiary; (b) the Company may make Restricted Payments in the form of shares of Qualified Capital Stock common stock of the Company; (4c) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of Company may purchase the Company; (5) the purchase’s common stock, redemptioncommon stock options, repaymentrestricted stock, defeasance restricted stock units and similar securities from present or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to former officers, directors or employees of the Company or any Restricted Subsidiary approved upon the death, disability or termination of employment of such officer, director or employee, provided that the aggregate amount of payments made pursuant to this paragraph (c) (net of any proceeds received by the Board Company in connection with resales of Directors any common stock, common stock options, restricted stock, restricted stock units and similar securities) shall not exceed $10,000,000 during any fiscal year; (d) the Company may make Restricted Payments in connection with the redemption, repurchase, retirement or other acquisition of any Capital Stock of the Company upon or in connection with the exercise or vesting of warrants, options, restricted stock units or similar rights if such Capital Stock constitutes all or a portion of the exercise price or is surrendered (or deemed surrendered) in connection with satisfying any income tax obligation incurred in connection with such exercise or vesting; (e) the Company may make cash payments (i) solely in lieu of the issuance of fractional shares in connection with the exercise of warrants, options, restricted stock units or other securities convertible into or exchangeable for Capital Stock of the Company; provided that any such cash payment shall not be for the purpose of evading the limitations of this Section 7.06 and (ii) to officers, directors, employees and consultants in respect of phantom stock, to the extent considered a Restricted Payment; (f) any non-wholly owned Restricted Subsidiary may, to the extent a Restricted Payment is made to the Company or another Restricted Subsidiary under this Section 7.06, make Restricted Payments to its other shareholders on a pro rata basis; (g) (i) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) the Company shall be in compliance with the Minimum Liquidity Test at the time of the proposed Restricted Payment and immediately after giving effect thereto, as certified by the Company to the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to the Administrative Agent), the Company may make Restricted Payments in connection with the redemption, repurchase, retirement or other acquisition of any Capital Stock of the Company; provided that the aggregate amount of payments made pursuant to this Section 7.06(g) in any fiscal year shall not exceed the sum of (x) $25,000,000 and (y) the aggregate amount of cash paid to the Company for its account in such fiscal year upon the exercise or vesting of warrants, options, restricted stock units or similar rights by officers, directors or employees of the Company or its Restricted Subsidiaries in such fiscal year (it being agreed that if any portion of such permitted amount is not used in any fiscal year, then 50% of such unused portion may be used in any subsequent fiscal year and any such carried over amount shall be deemed used first in such subsequent fiscal year); (h) the Company may make additional cash Restricted Payments pursuant to this clause (h) in an aggregate amount not to exceed $1,000,000 outstanding the Available Amount at any one timesuch time (as determined immediately before giving effect to the making of such Restricted Payment) so long as (A) no Default or Event of Default then exists or would result therefrom, (B) the proceeds Company would at the time of which are used solely and immediately after giving effect to such Restricted Payment be in compliance with (ai) the Interest Coverage Ratio Covenant and (ii) a Total Net Leverage Ratio of not greater than 2.00 to purchase common stock 1.00, in each caseFinancial Covenants, determined on a Pro Forma Basis giving effect to such Restricted Payment as of the last day of the most recently ended Test Period and (C) the Company shall be in connection compliance with a restricted stock or employee stock purchase planthe Minimum Liquidity Test at the time of the proposed Restricted Payment and immediately after giving effect thereto, or as certified by the Company to exercise stock options received pursuant the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to the Administrative Agent); (i) the Company may make Restricted Payments in an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans$25,000,000 in any fiscal year; and, together with accrued interest thereon, all other Restricted Payments made pursuant to item (a) of this clause (6i) after the Amendment No. 5 Effective Date, the greater of $75,000,000 and 3.25% of Consolidated Total Assets less the amount of voluntary payments, prepayments, repurchases, redemption or defeasance of Indebtedness made under Section 7.08(a)(III) after the Amendment No. 5 Effective Date; (j) the Company may make a Specified Distribution so long as (i) the Company would, immediately after giving effect to such Specified Distribution be in compliance with the Financial Covenants, determined on a Pro Forma Basis giving effect to such Specified Distribution as of the last day of the most recently ended Test Period (and assuming for such purposes the repayment, tender, repurchase, redemption, defeasance or discharge of any Indebtedness repaid, tendered, repurchased, redeemed, defeased or discharged substantially simultaneously with such Specified Distribution), (ii) no Default or Event of Default exists or will result therefrom and (iii) substantially simultaneously with such Specified Distribution, all outstanding Term Loans are repaid in full; (k) the Company may make Restricted Payments in the nature of (and not to exceed) the purchase price for Permitted Acquisitions made after the consummation thereof (including, without limitation, option payouts to officers, directors and employees in accordance with the applicable acquisition agreement); and (7l) the Company may make other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, so long as the case may beTotal Net Leverage Ratio would not exceed 2.00:1.00, pursuant determined on a Pro Forma Basis giving effect to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination as of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income last day of the Company for any periodmost recently ended Test Period.

Appears in 1 contract

Samples: Credit Agreement (Harsco Corp)

Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares on account of the Company's or such Restricted Subsidiary's Capital Stock of the Company or any Restricted Subsidiary other Equity Interests (other than dividends or distributions payable solely in shares of Qualified Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company and dividends or in options, warrants distributions payable by a Restricted Subsidiary to a Restricted Subsidiary or other rights to purchase Qualified Capital Stock of the Company); ; (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock or other Equity Interests of the Company or any Affiliate thereof of its Restricted Subsidiaries (other than any Wholly Owned such Equity Interest purchased from the Company or any Restricted Subsidiary for fair market value (as determined by the Board of Directors in good faith)); (iii) voluntarily prepay any Subordinated Indebtedness of the Company) , whether any such Subordinated Indebtedness is outstanding on, or any optionsissued after, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement date of any Disqualified Capital Stock original issuance of the Company solely in shares Senior Notes except as specifically permitted by the covenants of Qualified Capital Stock of the Company); this Indenture; (3) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4iv) make any Restricted Investment; Investment (all such payments or other actions described in clauses (i) through (iv) above dividends, distributions, purchases, redemptions, acquisitions, retirements, prepayments and Restricted Investments being collectively referred to as "Restricted Payments"), unless if, at the time of and after giving effect to the proposed such Restricted Payment: (IA) no a Default or Event of Default shall have occurred and be continuing;continuing or shall occur as a consequence thereof; or (IIB) immediately after such Restricted Payment and after giving effect thereto on a Pro Forma Basis, the Company could incur shall not be able to issue $1.00 of additional Indebtedness in accordance with pursuant to Section 4.09(a4.07(a) hereofof this Indenture; andor (IIIC) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made after January 1the date of original issuance of the Senior Notes, 2004 shall not exceed without duplication, exceeds the sum of (without duplication) of the following: (A1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1(including, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (orfor this purpose, if such Consolidated Net Income shall be a lossgains from Asset Sales and, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, any gain from a sale or disposition of a Restricted Investment) of the Company (or, in case such aggregate is a loss, 100% of such loss) for the period (taken as one accounting period) from the beginning of the first quarter commencing immediately after the date of original issuance of the Senior Notes and ended as of the Company's most recently ended fiscal quarter at the time of such Restricted Payment, plus (2) 100% of the aggregate net reduction cash proceeds and the fair market value of any property or securities (as determined by the Board of Directors in Investments in Unrestricted Subsidiaries resulting good faith) received by the Company from dividends, repayments the issue or sale of loans or advances, Capital Stock or other transfers Equity Interests of assetsthe Company subsequent to the date of original issuance of the Senior Notes (other than (x) Capital Stock or other Equity Interests issued or sold to a Restricted Subsidiary and (y) the issuance or sale of Disqualified Stock), in each case to plus (3) $2,500,000, plus (4) the amount by which the principal amount of and any accrued interest on either (x) Senior Indebtedness of the Company or (y) any Indebtedness of any Restricted Subsidiary is reduced on the Company's consolidated balance sheet upon the conversion or exchange other than by a Restricted Subsidiary after January 1subsequent to the date of original issuance of the Senior Notes of any Indebtedness of the Company or any Restricted Subsidiary (not held by the Company or any Restricted Subsidiary) for Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company (less the amount of any cash, 2004 from or the fair market value of any Unrestricted other property or securities (as determined by the Board of Directors in good faith), distributed by the Company or any Restricted Subsidiary (to Persons other than the Company or from the redesignation of an Unrestricted any other Restricted Subsidiary) upon such conversion or exchange), plus (5) if any Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary, the value of the Restricted Payment that would result if such Subsidiary were redesignated as a Non-Restricted Subsidiary at such time as determined in accordance with the second sentence of Section 4.16(a) hereof; provided, however, that for purposes of this clause (valued in each case as provided in the definition of “Investment”5), not to exceed in the case value of any Unrestricted redesignated Non-Restricted Subsidiary shall be reduced by the total amount that any such redesignation replenishes or increases the amount of Restricted Investments (other than Permitted Investmentspermitted to be made pursuant to Section 4.05(b)(ii) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004hereof. (b) Notwithstanding paragraph (aSection 4.05(a) abovehereof, the Company and its following shall not be prohibited as Restricted Subsidiaries may take the following actions so long as Payments: (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such said date of declaration for purposes of any calculation required by such payment would comply with all the provisions hereof (including, but not limited to, this Section 4.05); (ii) making Restricted Investments at any time, and from time to time, in an aggregate outstanding amount of paragraph $5,000,000 after the date of original issuance of the Senior Notes (it being understood that if any Restricted Investment after the date of original issuance of the Senior Notes pursuant to this clause (ii) is sold, transferred or otherwise conveyed to any Person other than the Company or a Restricted Subsidiary, the portion of the net cash proceeds or fair market value of securities or properties paid or transferred to the Company and its Restricted Subsidiaries in connection with such sale, transfer or conveyance that relates or corresponds to the repayment or return of the original cost of such a (a) above); (2) the payment of cash by the Company to the Parent for the repurchase, redemption, retirement or acquisition of the Parent's stock from the executives, management, employees or consultants of the Parent or its Subsidiaries pursuant to the terms of any dividend payable subscription, stockholder or other agreement or plan, and (b) the repurchase, redemption, retirement or acquisition of the Company's stock from the executives, management, employees or consultants of the Company or its Subsidiaries pursuant to the terms of any subscription, stockholder or other agreement or plan, together up to an aggregate amount not to exceed $5,000,000; provided that, the aggregate of the cumulative payments made by the Company pursuant to this clause (iii), clause (ii) and clause (iv) (other than, so long as Parent files consolidated income tax returns which include the Company, any payments pursuant to any tax sharing agreement) may not exceed $5,000,000; (iv) any loans, advances, distributions or payments from the Company to the Parent pursuant to intercompany Indebtedness, intercompany management agreements and other intercompany agreements and obligations; provided that, the aggregate of the cumulative payments made by the Company pursuant to this clause (iv) (other than, so long as Parent files consolidated income tax returns which include the Company, any payments pursuant to any tax sharing agreement), clauses (ii) and clause (iii) may not exceed $5,000,000; (v) any loans, advances, distributions or payments from the Company to its Restricted Subsidiaries, or any loans, advances, distributions or payments by the Parent or a Restricted Subsidiary to the Company or to another Restricted Subsidiary, in each case pursuant to intercompany Indebtedness, intercompany management agreements and other intercompany agreements and obligations (vi) the purchase, redemption, retirement or other acquisition of (A) any Senior Indebtedness of the Company or any Indebtedness of Restricted Subsidiaries required by its terms to be purchased, redeemed, retired or acquired with the net proceeds from asset sales (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) or upon a change of control (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) and (B) the Senior Notes pursuant to Sections 4.13 and 4.14 hereof; (vii) payments by the Company of, and to the Parent in amounts sufficient to permit Parent to make payments, in respect of (A) consulting, financial and investment banking fees under the TJC Agreement, provided, that no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, and the Company's Obligations to pay such fees under the TJC Agreement shall be subordinated expressly to the Company's Obligations in respect of the Senior Notes, and (B) indemnities, expenses and other amounts under the TJC Agreement; (viii) the redemption, repurchase, retirement or other acquisition of any Capital Stock or other Equity Interests of the Company or any Restricted Subsidiary in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company; ) of other Capital Stock or other Equity Interests of the Company (3other than any Disqualified Stock) or the redemption, repurchase, retirement or other acquisition of any Capital Stock or other Equity Interests of any Restricted Subsidiary in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to the Company or a Subsidiary of the Company) of other Capital Stock or other Equity Interests of such Restricted Subsidiary; provided that, in each case, any net cash proceeds that are utilized for any such redemption, repurchase, retirement or other acquisition, and any Net Income resulting therefrom, shall be excluded from Section 4.05(a)(C)(1) and (C)(2) hereof; (ix) the repurchasedefeasance, redemption or repurchase of pari passu or Subordinated Indebtedness with the net cash proceeds from an issuance of permitted Refinancing Indebtedness or the substantially concurrent sale (other acquisition or retirement than to a Subsidiary of any shares of any class the Company) of Capital Stock or other Equity Interests of the Company or of a Restricted Subsidiary (other than Disqualified Stock); provided that any net cash proceeds that are utilized for any such defeasance, redemption or repurchase, and any Net Income resulting therefrom, shall be excluded from Section 4.05(a)(C)(1) and (C)(2) hereof; (x) Restricted Investments made or received in connection with the sale, transfer or disposition of any business, properties or assets of the Company or any Restricted Subsidiary, provided, that if such sale, transfer or disposition constitutes an Asset Sale, the Company complies with Section 4.14 hereof; (xi) any Restricted Investment constituting securities or instruments of a Person issued in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance for trade or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of claims against such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company Person in connection with a restricted stock financial reorganization or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price restructuring of such stock optionsPerson; (xii) payments of fees, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; expenses and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant indemnities to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records directors of the Company for and its Restricted Subsidiaries or to the remaining portion Parent in respect of such period the fees expenses and indemnities of the directors of the Parent; and (2xiii) payments to Parent in respect of the Company shall be permitted payments of interest when due and principal at maturity in respect of up to rely $2 million in good faith on aggregate principal amount of the financial statements Parent's Senior Notes; and (xiv) payments to the Parent in respect of accounting, legal or other financial data derived from professional or administrative expenses or reimbursements of franchise or similar taxes and governmental charges incurred by the books and records Parent relating to the business, operations or finances of the Company that are available on the date and its Subsidiaries and in respect of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance fees and related expenses associated with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodongoing public reporting requirements.

Appears in 1 contract

Samples: Indenture (Ameriking Inc)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, on any shares of the Company's Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of its Qualified Capital Stock of the Company or in options, warrants or other rights to purchase acquire shares of such Qualified Capital Stock of the CompanyStock); (2ii) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, the Company's Capital Stock or any Capital Stock of any Affiliate of the Company or any Affiliate thereof (other than Capital Stock of any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company)Stock; (3iii) make any principal payment on on, or repurchase, redeem, defease defease, retire or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness Indebtedness; (excluding iv) declare or pay any intercompany Indebtedness between dividend or among distribution on any Capital Stock of any Restricted Subsidiary to any Person (other than (a) to the Company and or any of its Wholly Owned Restricted SubsidiariesSubsidiaries or (b) to all holders of Capital Stock of such Restricted Subsidiary on a pro rata basis), except in any case out of the proceeds of Permitted Refinancing Indebtedness; or (4v) make any Restricted Investment; Investment in any Person (such payments or other than any Permitted Investments) (any of the foregoing actions described in clauses (i) through (iv) above being collectively referred to v), other than any such action that is a Permitted Payment (as defined below), collectively, "Restricted Payments") (the amount of any such Restricted Payment, if other than cash, as determined by the board of directors of the Company, whose determination shall be conclusive and evidenced by a board resolution), unless at the time of (1) immediately before and immediately after giving effect to the such proposed Restricted Payment: (I) Payment on a pro forma basis, no Default or Event of Default shall have occurred and be continuing; ; (II2) immediately before and immediately after giving effect to such Restricted Payment on a pro forma basis, the Company could incur $1.00 of additional Indebtedness in accordance with Section 4.09(a) hereof; and (III) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries"Permitted Indebtedness") of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuing: (1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with under the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above); (2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company; (3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, described in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes; (6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6Section 1008(a); and (7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (c) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment would in the good faith determination of the Company be permitted under the requirements of this Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any period.

Appears in 1 contract

Samples: Indenture (Concentric Network Corp)

Limitation on Restricted Payments. (a) The Company shall will not, and shall will not permit any Restricted Subsidiary to, directly or indirectly, take the following actions: (1i) declare or pay any dividend on, or make any other distribution to holders of, any shares of Capital Stock of the Company or any Restricted Subsidiary (other than dividends or distributions payable solely in shares of Qualified Capital Stock of the Company or in options, warrants or other rights to purchase Qualified Capital Stock of the Company); (2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any Affiliate direct or indirect parent or Subsidiary thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company and other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company); (3iii) make any principal payment on or repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled principal payment, scheduled sinking fund payment or maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except in any case out of the net cash proceeds of Permitted Refinancing IndebtednessIndebtedness and except a payment of interest or principal at or within one year of the Stated Maturity thereof; or (4iv) make any Restricted Investment; (such payments or other actions described in clauses (i1) through (iv4) above being collectively referred to as “Restricted Payments”), unless at the time of and after giving effect to the proposed Restricted Payment: (I1) no Default or Event of Default shall have occurred and be continuing; (II2) the Company could incur $1.00 of additional Indebtedness in accordance with the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof); and (III3) the aggregate amount of all Restricted Payments declared or made after January 1, 2004 RP Start Date shall not exceed the sum (without duplication) of the following: (A) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on January 1, 2004 the RP Start Date and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be is a loss, minus 100% of such loss); plus (B) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cashcash (other than pursuant to the Contribution), received after January 1, 2004 the RP Start Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company; plus (C) the aggregate Net Cash Proceeds, or the Fair Market Value of Property assets and property other than cash, cash received after January 1, 2004 the RP Start Date by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus (D) the aggregate Net Cash Proceeds received after January 1, 2004 the RP Start Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange; plus (E) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after January 1, 2004 the RP Start Date from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of “Investment”), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004the RP Start Date. (b) Notwithstanding paragraph (aSection 4.07(a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), (4), (5) and (7) below) no Default or Event of Default shall have occurred and be continuingwill not prohibit: (1) the payment of any dividend on or the consummation of any Capital Stock of the Company redemption within 60 days after the date of declaration or giving of redemption notice, as the case may be, thereof, if at said date of declaration or notice such declaration date such declaration payment would have complied with the provisions of paragraph (aSection 4.07(a) above (and such payment shall be deemed to have been paid on such the date of declaration payment for purposes of any calculation required by the provisions of paragraph (a) aboveSection 4.07(a)); (2) the payment of any dividend payable from or distribution by a Restricted Subsidiary to the Company holders of its Equity Interests on a pro rata basis; (3) any Restricted Payment made in exchange for, or any out of the Net Cash Proceeds of the substantially concurrent sale (other Restricted than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Capital Stock), with any such payment being deemed to be “substantially concurrent” if made within 180 days of the sale of the Equity Interests in question; provided that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from Section 4.07(a)(3)(B); (34) the defeasance, redemption, repurchase, retirement or other acquisition of any Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the Net Cash Proceeds from an incurrence of any Permitted Refinancing Indebtedness permitted to be incurred under Section 4.09; (5) the repurchase, redemption or other acquisition or retirement for value of any shares of any class of Capital Stock Equity Interests of the Company or any Restricted Subsidiary, in exchange for, or out Subsidiary of the aggregate Net Cash Proceeds ofCompany held by any employees, a substantially concurrent issue and sale former employees, directors or former directors of the Company or any of its Restricted Subsidiaries (or heirs, estates or other than permitted transferees of such employees or directors) pursuant to a Restricted Subsidiary) any agreements (including employment agreements), management equity subscription agreements or stock option agreements or plans (or amendments thereto), approved by the Board of shares of Qualified Capital Stock Directors of the Company; (4) , under which such individuals purchase or sell or are granted the repurchase, redemption, repayment, defeasance right to purchase or other acquisition or retirement for value sell shares of any Subordinated Indebtedness in exchange for, or out of Capital Stock; provided that the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; (5) the purchase, redemption, repayment, defeasance or other acquisition or retirement price paid for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of all such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchasedrepurchased, redeemed, repaid, defeased, acquired or retiredretired Equity Interests shall not exceed $10,000,000 in any calendar year, plus the amount of with unused amounts in any premium required calendar year being permitted to be paid carried over to succeeding calendar years subject to a maximum of $20,000,000 in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notescalendar year; (6) loans made to officers, directors or employees made in the ordinary course of business of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 5,000,000 outstanding at any one time; (7) the repurchase of Equity Interests deemed to occur upon the exercise of stock or other equity options to the extent such Equity Interests represent a portion of the exercise price of those stock or other equity options and any repurchase or other acquisition of Equity Interests is made in lieu of or to satisfy withholding taxes in connection with any exercise or exchange of stock options, warrants, incentives or other rights to acquire Equity Interests; (8) upon the occurrence of a Change of Control or an Asset Sale and within 60 days after the completion of the offer to repurchase the Notes under Sections 4.15 or 4.10 (including the purchase of all Notes tendered and required to be purchased), any purchase, repurchase, redemption, defeasance, acquisition or other retirement for value of Subordinated Indebtedness required under the terms thereof as a result of such Change of Control or Asset Sale at a purchase or redemption price not to exceed 101% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon, if any; provided that, in the notice to Holders relating to a Change of Control or Asset Sale hereunder, the proceeds of which are used solely Company shall describe this clause (a8); (9) to the purchase common stock of by the Company of fractional shares arising out of stock dividends, splits or business combinations or conversion of convertible or exchangeable securities of debt or equity issued by the Company; (10) payments to dissenting stockholders (x) pursuant to applicable law or (y) in connection with the settlement or other satisfaction of legal claims made pursuant to or in connection with a restricted stock consolidation, merger or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, transfer of assets in connection with a principal amount transaction that is not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of prohibited by this clause (6); andIndenture; (711) dividends on Disqualified Capital Stock of the Company or preferred stock of any Restricted Subsidiary if such dividends are included in the calculation of Consolidated Interest Expense; or (12) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and 15,000,000. (c) The actions described in clauses (1), (3), (4) and (6) of this paragraph (bSection 4.07(b)(1) shall be a Restricted Payments Payment that shall be permitted to be made in accordance with this paragraph (b) Section 4.07(b), but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (aSection 4.07(a)(3) (provided that any dividend paid pursuant to clause (1) of this paragraph (bSection 4.07(b)(1) shall reduce the amount that would otherwise be available under clause (3) of paragraph (aSection 4.07(a)(3) when declared, but not also when subsequently paid pursuant to such clause (1Section 4.07(b)(1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a). (cd) The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. (d) In computing Consolidated Net Income under paragraph (a) above. For purposes of determining compliance with this Section 4.07, (1) the Company shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes if a Restricted Payment which, at meets the time criteria of more than one of the making types of such Restricted Payment would Payments described in Section 4.07(b)(1) through (12) or pursuant to Section 4.07(a), the good faith determination of the Company be permitted under the requirements of this IndentureCompany, in its sole discretion, may order and classify, and subsequently reorder and reclassify, such Restricted Payment shall be deemed to have been made in any manner in compliance with this Indenture notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting Consolidated Net Income of the Company for any periodSection 4.07.

Appears in 1 contract

Samples: Indenture (Comstock Resources Inc)

Draft better contracts in just 5 minutes Get the weekly Law Insider newsletter packed with expert videos, webinars, ebooks, and more!