Limitation on Debt. (a) The Parent and the Obligors shall not, and shall not permit any Subsidiary to permit there to be outstanding Debt except: (i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described on Schedule 10.4 hereof; (ii) Funded Debt of a Subsidiary or the Parent owed to either Obligor; and (iii) additional Debt, provided that the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998. (b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that the sum of (1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be permitted to be incurred pursuant to paragraph (a) of this Section 10.4. (c) The Parent and the Obligors may renew, extend, substitute, refinance or replace any Consolidated Funded Debt permitted pursuant to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii)); provided that the principal amount of Consolidated Funded Debt resulting from such renewal, extension, substitution, refinancing or replacement shall not exceed the original principal amount of such Consolidated Funded Debt and that no additional security shall be granted to secure such Consolidated Funded Debt.
Appears in 1 contract
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, no Default or Event of Default would occur or be continuing and (ii) at the time of such incurrence and after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, taken as one period, would be greater than 2.0 to 1.0.
(b) Section 4.06(a) shall not, however, prohibit the following (collectively, “Permitted Debt”):
(i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described the New Unsecured Notes issued on Schedule 10.4 hereof; the Issue Date;
(ii) Funded Debt of a Subsidiary or the incurrence by the Parent owed Guarantor or any Restricted Subsidiary of Debt under Credit Facilities in an aggregate principal amount not to either Obligor; exceed the greater of (i) (x) at any time prior to the completion of the Disposition, $850,000,000 or (y) at any time after the completion of the Disposition, $700,000,000 and (ii) an amount equal to (I) 85.0% of Total Receivables plus 70.0% of Total Inventories less (II) $275,000,000;
(iii) additional Debt, provided that any Existing Debt of the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed Parent Guarantor or any Restricted Subsidiary (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than Debt described in clauses (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; of this Section 4.06(b));
(iv) the Notesincurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, Section 4.06(a), sub clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(xvii) (i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Person (x) incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would have been able to incur $1.00 of additional Debt pursuant to Section 4.06(a) after giving effect to the incurrence of such Debt pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) Debt consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in U.S. dollar where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to U.S. dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Dollar Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that an Issuer, the Parent Guarantor or a Subsidiary Guarantor may incur under this Section 4.06.
(e) For purposes of determining any particular amount of Debt under this Section 4.06:
(i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Debt otherwise included in the determination of such particular amount shall not be included;
(ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.07 shall not be treated as Debt;
(iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional preferred stock or Debt shall not be treated as Debt; and
(iv) the reclassification of preferred stock as Debt due to a change in accounting principles shall not be treated as Debt.
(f) In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Parent Guarantor, in its sole discretion, shall classify items of Debt and that no additional security shall only be required to include the amount and type of such Debt in one of such clauses and the Parent Guarantor shall be granted entitled to secure divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time.
(g) The amount of any Debt outstanding as of any date will be:
(i) in the case of any Debt issued with original issue discount, the amount of the liability in respect thereof determined in accordance with IFRS;
(ii) the principal amount of the Debt, in the case of any other Debt; and
(iii) in respect of Debt of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such Consolidated Funded Debtassets at the date of determination; and
(B) the amount of the Debt of the other Person.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the Notes incurrence of such Debt and all existing Consolidated Funded Debt as the application of January 23the proceeds thereof, 1998 on a pro forma basis, no Default or Event of Default would occur or be continuing and described on Schedule 10.4 hereof; (ii) Funded at the time of such incurrence and after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a Subsidiary or pro forma basis, the Parent owed to either Obligor; and (iii) additional Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, provided that the ratio of Consolidated Total Debt taken as one period, would be greater than 2.0 to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 19981.0.
(b) The Parent Section 4.06(a) shall not permit its Subsidiaries not, however, prohibit the following (including the Obligors) to permit there to be outstanding collectively, “Permitted Debt, other than ”):
(i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described the August 2019 Notes issued on Schedule 10.4 hereof, the August 2019 Issue Date;
(ii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt owed under Credit Facilities in an aggregate principal amount not to exceed the greater of (i) (x) at any time prior to the Parent completion of the Disposition, $850,000,000 or either Obligor(y) at any time after completion of the Disposition, $700,000,000 and (ii) an amount equal to (I) 85.0% of Total Receivables plus 70.0% of Total Inventories less (II) $275,000,000;
(iii) Permitted any Existing Debt of the Parent Guarantor or any Restricted Subsidiary Guaranties; (other than Debt described in clauses (i) and (ii) of this Section 4.06(b));
(iv) the Notesincurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, Section 4.06(a), sub clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Person (x) incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would have been able to incur $1.00 of additional Debt pursuant to Section 4.06(a) after giving effect to the incurrence of such Debt pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) Debt consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in U.S. dollars where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to U.S. dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Dollar Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that an Issuer, the Parent Guarantor or a Subsidiary Guarantor may incur under this Section 4.06.
(e) For purposes of determining any particular amount of Debt under this Section 4.06:
(i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Debt otherwise included in the determination of such particular amount shall not be included;
(ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.07 shall not be treated as Debt;
(iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional preferred stock or Debt shall not be treated as Debt; and
(iv) the reclassification of preferred stock as Debt due to a change in accounting principles shall not be treated as Debt.
(f) In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Parent Guarantor, in its sole discretion, shall classify items of Debt and that no additional security shall only be required to include the amount and type of such Debt in one of such clauses and the Parent Guarantor shall be granted entitled to secure divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time.
(g) The amount of any Debt outstanding as of any date will be:
(i) in the case of any Debt issued with original issue discount, the amount of the liability in respect thereof determined in accordance with IFRS;
(ii) the principal amount of the Debt, in the case of any other Debt; and
(iii) in respect of Debt of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such Consolidated Funded Debtassets at the date of determination; and
(B) the amount of the Debt of the other Person.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, no Default or Event of Default would occur or be continuing and (ii) at the time of such incurrence and after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, taken as one period, would be greater than 2.0 to 1.0.
(b) Section 4.06(a) shall not, however, prohibit the following (collectively, “Permitted Debt”):
(i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described the New Secured Notes issued on Schedule 10.4 hereof; the Issue Date;
(ii) Funded Debt of a Subsidiary or the incurrence by the Parent owed Guarantor or any Restricted Subsidiary of Debt under Credit Facilities in an aggregate principal amount not to either Obligor; exceed the greater of (i) (x)at any time prior to the completion of the Disposition, $850,000,000 or (y) at any time after the completion of the Disposition, $700,000,000 and (ii) an amount equal to (I) 85.0% of Total Receivables plus 70.0% of Total Inventories less (II) $275,000,000;
(iii) additional Debt, provided that any Existing Debt of the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed Parent Guarantor or any Restricted Subsidiary (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than Debt described in clauses (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; of this Section 4.06(b));
(iv) the Notesincurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, Section 4.06(a), sub clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(xvii) (i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Person (x) incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would
(a) after giving effect to the incurrence of such Debt pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) Debt consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in U.S. dollar where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to U.S. dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Dollar Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that an Issuer, the Parent Guarantor or a Subsidiary Guarantor may incur under this Section 4.06.
(e) For purposes of determining any particular amount of Debt under this Section 4.06:
(i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Debt otherwise included in the determination of such particular amount shall not be included;
(ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.07 shall not be treated as Debt;
(iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional preferred stock or Debt shall not be treated as Debt; and
(iv) the reclassification of preferred stock as Debt due to a change in accounting principles shall not be treated as Debt.
(f) In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Parent Guarantor, in its sole discretion, shall classify items of Debt and that no additional security shall only be required to include the amount and type of such Debt in one of such clauses and the Parent Guarantor shall be granted entitled to secure divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time.
(g) The amount of any Debt outstanding as of any date will be:
(i) in the case of any Debt issued with original issue discount, the amount of the liability in respect thereof determined in accordance with IFRS;
(ii) the principal amount of the Debt, in the case of any other Debt; and
(iii) in respect of Debt of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such Consolidated Funded Debtassets at the date of determination; and
(B) the amount of the Debt of the other Person.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, Incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “Incur” or, as appropriate, an “Incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to Incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the Incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, no Default or Event of Default would occur or be continuing and (ii) at the time of such Incurrence and after giving effect to the Incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the Incurrence of such Debt, taken as one period, would be greater than 2.0 to 1.0.
(b) Section 4.06(a) shall not, however, prohibit the following (collectively, “Permitted Debt”):
(i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described the New Unsecured Notes issued on Schedule 10.4 hereof; the Issue Date;
(ii) Funded Debt of a Subsidiary or the Incurrence by the Parent owed Guarantor or any Restricted Subsidiary of Debt under Credit Facilities in an aggregate principal amount not to either Obligor; exceed the greater of (i) €350,000,000 and (ii) an amount equal to (I) 85% of Total Receivables plus 60% of Total Inventories less (II) €250,000,000;
(iii) additional Debt, provided that any Existing Debt of the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed Parent Guarantor or any Restricted Subsidiary (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than Debt described in clauses (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; of this Section 4.06(b));
(iv) the NotesIncurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities Incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an Incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the Incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt Incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, Incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses Incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so Incurred when aggregated with other Debt previously Incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of €150,000,000 and 2.0% of Total Assets; and provided, further, that the total principal amount of any Debt Incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of Incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses Incurred in connection with such acquisition, construction or development);
(vii) the Incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt Incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the Incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements entered into in the ordinary course of business and not for speculative purposes;
(ix) the Incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements entered into in the ordinary course of business and not for speculative purposes;
(x) the Incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements entered into in the ordinary course of business and not for speculative purposes;
(xi) the Incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the Incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that no such Debt is extinguished within five Business Days of Incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary Incurred pursuant to any Permitted Receivables Financing;
(xiv) the Incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt Incurred by it pursuant to, or described in, Section 4.06(a) and sub-clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of €75,000,000 and 1.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the Incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of €265,000,000 and 3.5% of Total Assets;
(xix) Debt of any Person (x) Incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) Incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would have been able to Incur €1.00 of additional security shall Indebtedness pursuant to Section 4.06(a) after giving effect to the Incurrence of such Indebtedness pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be granted less than it was immediately prior to secure giving pro forma effect to such Consolidated Funded Debt.acquisition or other transaction; and
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Company shall not, and shall not permit any Subsidiary of its Restricted Subsidiaries to, issue, directly or indirectly, any Debt unless, after giving effect to permit there to be outstanding the issuance of such Debt except: and the receipt and application of the proceeds therefrom, (i) the Notes Consolidated Leverage Ratio is less than or equal to 5:00 to 1; and all existing Consolidated Funded Debt as of January 23, 1998 and described on Schedule 10.4 hereof; (ii) Funded Debt of a Subsidiary or the Parent owed to either Obligor; and (iii) additional Debt, provided that the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 Coverage Ratio exceeds the amount set forth below with respect to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 in which such Debt is to 1.00 for the period from April 1, 1998 through be incurred: Period Consolidated EBITDA Coverage Ratio ------ ---------------------------------- June 30, 19982000 -- June 29, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 2003 1.75 June 30, 1998 and (D) 3.00 to 1.00 after September 2003 -- June 29, 2004 2.00 June 30, 19982004 and thereafter 2.25 If the Company or any of its Restricted Subsidiaries proposes to issue Debt in excess of $5.0 million (other than as provided under SECTION 4.2(b)) pursuant to this SECTION 4.2(a), it shall furnish to the Holders of the Notes on or prior to five days prior to the issuance of such Debt a calculation in reasonable detail, certified by the chief financial officer, treasurer or controller of the Company, demonstrating compliance with this SECTION 4.2(a). If the Company or any of its Restricted Subsidiaries proposes to issue Debt of $5.0 million or less (other than as provided under SECTION 4.2(b)) pursuant to this SECTION 4.2(a), it shall furnish to the Holders of the Notes as soon as commercially practicable (but in no event more than ten days) thereafter a calculation in reasonable detail, certified by the chief financial officer, treasurer or controller of the Company, demonstrating compliance with this SECTION 4.2(a).
(b) The Parent shall not permit its Notwithstanding SECTION 4.2(a), but subject to SECTION 4.2(c), the Company and the Restricted Subsidiaries (including of the Obligors) to permit there to be outstanding Company may issue the following Debt, other than :
(i) Consolidated Funded Debt of Subsidiaries issued pursuant to the Credit Agreement in an amount up to the Maximum Credit Agreement Amount and Debt (including Secured Debt) outstanding as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that the sum of Original Closing Date. The "MAXIMUM CREDIT AGREEMENT AMOUNT" at any date shall mean (1) Total Debt outstanding of all Subsidiaries plus One Hundred Seventy Million Dollars ($170,000,000) less (2) 50% of the cumulative aggregate payments of principal of the Term Loans (as defined in the Credit Agreement), from and after the Original Closing Date to the applicable date of determination, excluding any unscheduled pre-payments of principal made in connection with a refinancing of Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be permitted to be incurred issued pursuant to paragraph (a) of this Section 10.4.
(c) The Parent and Term Loans under the Obligors may renew, extend, substitute, refinance or replace any Consolidated Funded Debt permitted pursuant to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii)); provided that the principal amount of Consolidated Funded Debt resulting from such renewal, extension, substitution, refinancing or replacement shall not exceed the original principal amount of such Consolidated Funded Debt and that no additional security shall be granted to secure such Consolidated Funded Debt.Credit Agreement;
Appears in 1 contract
Sources: Subordinated Note Agreement (Mobile Services Group Inc)
Limitation on Debt. (a) The Parent and the Obligors Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that any Permitted Subsidiary shall be permitted to permit there incur Debt (including Acquired Debt) if (i) after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, no Default or Event of Default would occur or be outstanding continuing and (ii) at the time of such incurrence and after giving effect to the incurrence of such Debt except: and the application of the proceeds thereof, on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio for the Issuer for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, taken as one period, would be greater than 2.0 to 1.0.
(b) Section 4.06(a) will not, however, prohibit the following (collectively, “Permitted Debt”):
(i) the incurrence by Permitted Subsidiaries of Debt under Credit Facilities in an aggregate principal amount not to exceed the greater of (i) $700,000,000 and (ii) an amount equal to (I) 85% of Total Receivables plus 70% of Total Inventories less (II) $275,000,000;
(ii) the incurrence by the Issuer of Debt represented by (i) the original Notes issued on the Issue Date and all existing Consolidated Funded (ii) Additional Notes issued from time to time in payment of interest or Additional Amounts on (x) such Notes or (y) such Additional Notes so issued from time to time;
(iii) any Debt as of January 23the Issuer or any of its Restricted Subsidiaries (other than Debt described in clauses (i) and (ii) of this paragraph (b)); outstanding on the Issue Date;
(iv) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Debt between the Issuer and any of its Restricted Subsidiaries or between or among Restricted Subsidiaries; provided that:
(A) if the Issuer is the obligor on any such Debt, 1998 such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and described on Schedule 10.4 hereofaccounting operations of the Issuer and its Restricted Subsidiaries); and
(A) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Issuer or a Restricted Subsidiary of the Issuer) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Issuer or another Restricted Subsidiary of the Issuer ceases to be a Restricted Subsidiary of the Issuer, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) guarantees of (i) the Issuer’s Debt by Restricted Subsidiaries that are not Permitted Subsidiaries; (ii) Funded Debt of any of its Restricted Subsidiaries that are not Permitted Subsidiaries by any Restricted Subsidiary that is not a Subsidiary or the Parent owed to either ObligorPermitted Subsidiary; and (iii) additional Debt, provided Debt of any Permitted Subsidiary by any Permitted Subsidiary to the extent that the ratio of Consolidated Total guaranteed Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that the sum of (1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The Parent and the Obligors may renewincurrence by any Permitted Subsidiaries of Debt represented by Capitalized Lease Obligations, extendmortgage financings, substitutepurchase money obligations or other Debt incurred or assumed in connection with the acquisition or development of real or personal, refinance movable or replace immovable, property or assets, in each case, incurred for the purpose of financing or refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in any Permitted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the relevant Permitted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Issuer or any of its Restricted Subsidiaries of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Issuer or any of its Restricted Subsidiaries of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by any Permitted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Issuer or any of its Restricted Subsidiaries of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Issuer or any of its Restricted Subsidiaries of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Issuer or any of its Restricted Subsidiaries of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Issuer or any of its Restricted Subsidiaries arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that no such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by any Permitted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of Permitted Subsidiaries incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, paragraphs (a), (b)(ii) and (b)(iii), this paragraph (b)(xiv) and paragraphs (b)(xviii), (b)(xix) and (b)(xx) of this Section 4.06, as the case may be;
(xv) guarantees by Permitted Subsidiaries of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(xvii) (i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by Permitted Subsidiaries (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Permitted Subsidiary (x) incurred and outstanding on the date on which such Person becomes a Permitted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Permitted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Permitted Subsidiary or was otherwise acquired by a Permitted Subsidiary; provided, however, with respect to each of clause (xix)(x) and (xix)(y), that at the time of such acquisition or other transaction (1) a Permitted Subsidiary would have been able to incur $1.00 of additional security Debt pursuant to Section 4.06(a) after giving effect to the incurrence of such Debt pursuant to this clause (xix) or (2) the Fixed Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) the incurrence of Debt by a Permitted Subsidiary consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in euros where Debt is denominated in a different currency, the amount of such Debt will be the Euro Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to euros) covering principal amounts payable on such Debt, the amount of such Debt expressed in euros shall be granted adjusted to secure take into account the effect of such Consolidated Funded Debtagreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Euro Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Subsidiary Restricted Group Member to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to permit there (collectively, “incur”) any Debt (including Acquired Debt); provided, however, that the Parent Guarantor and any Restricted Group Member may incur Debt if at the time of such incurrence, the Fixed Charge Coverage Ratio for the Parent Guarantor's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Debt, taken as one period, would be greater than 2.25 to 1.00, determined on a pro forma basis after giving effect to the incurrence of such Debt and the application of the net proceeds therefrom; provided that after giving effect to the incurrence of such Debt and the application of the net proceeds therefrom, on a pro forma basis, the aggregate amount of Debt (including Acquired Debt that may be outstanding Debt except: (i) incurred pursuant to this paragraph by Restricted Group Members that are not the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described on Schedule 10.4 hereof; (ii) Funded Debt of Issuer or a Subsidiary or Guarantor shall not exceed the Parent owed to either Obligor; greater of €50.0 million and (iii) additional Debt, provided that the ratio 3.25% of Consolidated Total Debt to Consolidated EBITDA shall Assets, at no any one time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998outstanding.
(b) The Parent foregoing paragraph shall not permit its Subsidiaries not, however, prohibit the incurrence of any of the following items of Debt (including the Obligors) to permit there to be outstanding collectively “Permitted Debt, other than ”):
(i) Consolidated Funded the incurrence by the Parent Guarantor or any Restricted Group Member (other than the Issuer) of Debt under Credit Facilities and Surety Bond Facilities in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the greater of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, €200.0 million;
(ii) Debt owed to the incurrence by the Parent Guarantor or either Obligor, any Restricted Group Member of Existing Debt;
(iii) Permitted Subsidiary Guaranties; the incurrence by (x) the Issuer of Debt represented by the Notes (other than Additional Notes) and (y) the Guarantors of Debt represented by the Guarantees;
(iv) the Notes; incurrence by the Parent Guarantor or any Restricted Group Member of Permitted Refinancing Debt in exchange for, or the net proceeds of which are used to refund, refinance or replace Debt (other than intercompany Debt between the Parent Guarantor and (vany Restricted Group Member or between any Restricted Group Members) additional Debt provided that the sum of (1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph under Section 4.06(a) hereof or clauses (aii), (iii), (iv) or (xii) of this Section 10.4.
(c) The Parent and the Obligors may renew, extend, substitute, refinance or replace any Consolidated Funded Debt permitted pursuant to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii)); provided that the principal amount of Consolidated Funded Debt resulting from such renewal, extension, substitution, refinancing or replacement shall not exceed the original principal amount of such Consolidated Funded Debt and that no additional security shall be granted to secure such Consolidated Funded Debt.Section
Appears in 1 contract
Sources: Indenture
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the Notes incurrence of such Debt and all existing Consolidated Funded Debt as the application of January 23the proceeds thereof, 1998 on a pro forma basis, no Default or Event of Default would occur or be continuing and described on Schedule 10.4 hereof; (ii) Funded at the time of such incurrence and after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a Subsidiary or pro forma basis, the Parent owed to either Obligor; and (iii) additional Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, provided that the ratio of Consolidated Total Debt taken as one period, would be greater than 2.0 to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 19981.0.
(b) The Parent Section 4.06(a) shall not permit its Subsidiaries not, however, prohibit the following (including the Obligors) to permit there to be outstanding collectively, “Permitted Debt, other than ”):
(i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described the August 2019 Notes issued on Schedule 10.4 hereof, the August 2019 Issue Date;
(ii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt owed under Credit Facilities in an aggregate principal amount not to exceed the greater of (i) (x) at any time prior to the Parent completion of the Disposition, $850,000,000 or either Obligor(y) at any time after the completion of the Disposition, $700,000,000 and (ii) an amount equal to (I) 85.0% of Total Receivables plus 70.0% of Total Inventories less (II) $275,000,000;
(iii) Permitted any Existing Debt of the Parent Guarantor or any Restricted Subsidiary Guaranties; (other than Debt described in clauses (i) and (ii) of this Section 4.06(b));
(iv) the Notesincurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, Section 4.06(a), sub clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Person (x) incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would have been able to incur $1.00 of additional Debt pursuant to Section 4.06(a) after giving effect to the incurrence of such Debt pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) Debt consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in U.S. dollars where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to U.S. dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Dollar Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that an Issuer, the Parent Guarantor or a Subsidiary Guarantor may incur under this Section 4.06.
(e) For purposes of determining any particular amount of Debt under this Section 4.06:
(i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Debt otherwise included in the determination of such particular amount shall not be included;
(ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.07 shall not be treated as Debt;
(iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional preferred stock or Debt shall not be treated as Debt; and
(iv) the reclassification of preferred stock as Debt due to a change in accounting principles shall not be treated as Debt.
(f) In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Parent Guarantor, in its sole discretion, shall classify items of Debt and that no additional security shall only be required to include the amount and type of such Debt in one of such clauses and the Parent Guarantor shall be granted entitled to secure divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time.
(g) The amount of any Debt outstanding as of any date will be:
(i) in the case of any Debt issued with original issue discount, the amount of the liability in respect thereof determined in accordance with IFRS;
(ii) the principal amount of the Debt, in the case of any other Debt; and
(iii) in respect of Debt of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such Consolidated Funded Debtassets at the date of determination; and
(B) the amount of the Debt of the other Person.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors Guarantor shall not, and shall not permit any Restricted Subsidiary to, create, issue, incur, assume, guarantee or in any manner become directly or indirectly liable with respect to permit there or otherwise become responsible for, contingently or otherwise, the payment of (individually and collectively, to “incur” or, as appropriate, an “incurrence”), any Debt (including any Acquired Debt); provided that the Parent Guarantor, each Issuer and any Restricted Subsidiary shall be outstanding permitted to incur Debt except: (including Acquired Debt) if in each case (i) after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, no Default or Event of Default would occur or be continuing and (ii) at the time of such incurrence and after giving effect to the incurrence of such Debt and the application of the proceeds thereof, on a pro forma basis, the Consolidated Fixed Charge Coverage Ratio for the four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Debt, taken as one period, would be greater than 2.0 to 1.0.
(b) Section 4.06(a) shall not, however, prohibit the following (collectively, “Permitted Debt”):
(i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described issued on Schedule 10.4 hereof; the Issue Date;
(ii) Funded Debt of a Subsidiary or the incurrence by the Parent owed Guarantor or any Restricted Subsidiary of Debt under Credit Facilities in an aggregate principal amount not to either Obligorexceed the greater of (i) $700,000,000 and (ii) an amount equal to (I) 85.0% of Total Receivables plus 70.0% of Total Inventories less (II) $275,000,000; and
(iii) additional Debt, provided that any Existing Debt of the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed Parent Guarantor or any Restricted Subsidiary (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than Debt described in clauses (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; of this Section 4.06(b));
(iv) the Notesincurrence by the Parent Guarantor or any Restricted Subsidiary of intercompany Debt between the Parent Guarantor and any Restricted Subsidiary or between or among Restricted Subsidiaries; provided that:
(A) if an Issuer or a Guarantor is the obligor on any such Debt, unless required by a Credit Facility and only to the extent legally permitted, such Debt must be unsecured (except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with cash management, cash pooling, tax and accounting operations of the Parent Guarantor and its Restricted Subsidiaries); and
(B) (x) any disposition, pledge or transfer of any such Debt to a Person (other than a disposition, pledge or transfer to the Parent Guarantor or a Restricted Subsidiary) and (y) any transaction pursuant to which any Restricted Subsidiary that has Debt owing by the Parent Guarantor or another Restricted Subsidiary ceases to be a Restricted Subsidiary, will, in each case, be deemed to be an incurrence of such Debt not permitted by this clause (iv);
(v) additional guarantees of the Parent Guarantor or any Restricted Subsidiary of Debt provided of the Parent Guarantor or any Restricted Subsidiary to the extent that the sum of (1) Total guaranteed Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be was permitted to be incurred pursuant to paragraph (a) by another provision of this Section 10.4.4.06;
(cvi) The the incurrence by the Parent and Guarantor or any Restricted Subsidiary of Debt represented by Capitalized Lease Obligations, mortgage financings, purchase money obligations or other Debt incurred or assumed in connection with the Obligors may renewacquisition or development of real or personal, extendmovable or immovable, substituteproperty or assets, refinance in each case, incurred for the purpose of financing or replace refinancing all or any Consolidated Funded Debt permitted pursuant to paragraphs part of the purchase price, lease expense or cost of construction or improvement of property, plant, equipment or other assets used in the Parent Guarantor’s or any Restricted Subsidiary’s business (a) and (b) above (except (a)(ii) and (b)(ii)including any reasonable related fees or expenses incurred in connection with such acquisition or development); provided that the principal amount of Consolidated Funded such Debt resulting from such renewal, extension, substitution, refinancing or replacement so incurred when aggregated with other Debt previously incurred in reliance on this clause (vi) and still outstanding shall not in the aggregate exceed the original greater of $510,000,000 and 6.0% of Total Assets; and provided, further, that the total principal amount of any Debt incurred in connection with an acquisition or development permitted under this clause (vi) did not in each case at the time of incurrence exceed (A) the Fair Market Value of the acquired or constructed asset or improvement so financed or (B) in the case of an uncompleted constructed asset, the amount of the asset to be constructed, as determined on the date the contract for construction of such Consolidated Funded asset was entered into by the Parent Guarantor or the relevant Restricted Subsidiary (including, in each case, any reasonable related fees and expenses incurred in connection with such acquisition, construction or development);
(vii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt arising from agreements providing for guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock (other than guarantees or similar credit support given by the Parent Guarantor or any Restricted Subsidiary of Debt incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); provided that the maximum aggregate liability in respect of all such Debt permitted pursuant to this clause (vii) shall at no time exceed the net proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received from the sale of such assets;
(viii) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Commodity Hedging Agreements not for speculative purposes;
(ix) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Currency Agreements not for speculative purposes;
(x) the incurrence by the Parent Guarantor or any Restricted Subsidiary of Debt under Interest Rate Agreements not for speculative purposes;
(xi) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary of Debt in respect of workers’ compensation and claims arising under similar legislation, or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
(xii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Debt is extinguished within five Business Days of incurrence, (B) bankers’ acceptances, performance, surety, judgment, completion, payment, appeal or similar bonds, instruments or obligations, (C) completion guarantees, advance payment, customs, VAT or other tax guarantees or similar instruments provided or letters of credit obtained by the Parent Guarantor or any Restricted Subsidiary in the ordinary course of business, and (D) the financing of insurance premiums in the ordinary course of business;
(xiii) any Debt of the Parent Guarantor or any Restricted Subsidiary incurred pursuant to any Permitted Receivables Financing;
(xiv) the incurrence by a Person of Permitted Refinancing Debt in exchange for or the net proceeds of which are used to refund, replace or refinance Debt incurred by it pursuant to, or described in, Section 4.06(a), sub clauses (i) and (iii), this sub-clause (xiv) and sub-clauses (xviii), (xix) and (xx) of this Section 4.06(b), as the case may be;
(xv) guarantees by the Parent Guarantor or a Restricted Subsidiary of Debt incurred by Permitted Joint Ventures in an aggregate principal amount at any one time outstanding not to exceed an amount equal to the greater of $150,000,000 and 2.0% of Total Assets;
(xvi) cash management obligations and Debt in respect of netting services, pooling arrangements or similar arrangements in connection with cash management in the ordinary course of business consistent with past practice;
(i) take-or-pay obligations in the ordinary course of business, (ii) customer deposits and advance payments in the ordinary course of business received from customers for goods or services purchased in the ordinary course of business and (iii) manufacturer, vendor financing, customer and supply arrangements in the ordinary course of business;
(xviii) the incurrence of Debt by the Parent Guarantor or any Restricted Subsidiary (other than and in addition to Debt permitted under clauses (i) through (xvii) above and clauses (xix) and (xx) below) in an aggregate principal amount at any one time outstanding not to exceed, together with any Permitted Refinancing Debt in respect thereof, the greater of $350,000,000 and 5.0% of Total Assets;
(xix) Debt of any Person (x) incurred and outstanding on the date on which such Person becomes a Restricted Subsidiary of the Parent Guarantor or another Restricted Subsidiary of the Parent Guarantor or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Parent Guarantor or any Restricted Subsidiary or (y) incurred to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent Guarantor or a Restricted Subsidiary; provided, however, with respect to each of sub-clause (x) and (y) of this Section 4.06(b)(xix), that at the time of such acquisition or other transaction (1) the Parent Guarantor would have been able to incur $1.00 of additional Debt pursuant to Section 4.06(a) after giving effect to the incurrence of such Debt pursuant to this Section 4.06(b)(xix) or (2) the Fixed Charge Coverage Ratio of the Parent Guarantor and its Restricted Subsidiaries would not be less than it was immediately prior to giving pro forma effect to such acquisition or other transaction;
(xx) Contribution Debt; and
(xxi) Debt consisting of local lines of credit, overdraft facilities or local working capital facilities in an aggregate outstanding principal amount at any one time not to exceed the greater of $75,000,000 and 1.0% of Total Assets.
(c) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt of the same class will not be deemed to be an incurrence of Debt for purposes of this Section 4.06.
(d) For purposes of determining compliance with any restriction on the incurrence of Debt in U.S. dollars where Debt is denominated in a different currency, the amount of such Debt will be the Dollar Equivalent determined on the date of such determination; provided that if any such Debt denominated in a different currency is subject to a Currency Agreement (with respect to U.S. dollars) covering principal amounts payable on such Debt, the amount of such Debt expressed in U.S. dollars shall be adjusted to take into account the effect of such agreement. The principal amount of any Permitted Refinancing Debt incurred in the same currency as the Debt being refinanced shall be the Dollar Equivalent of the Debt refinanced determined on the date such Debt being refinanced was initially incurred. Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that an Issuer, the Parent Guarantor or a Subsidiary Guarantor may incur under this Section 4.06.
(e) For purposes of determining any particular amount of Debt under this Section 4.06:
(i) obligations with respect to letters of credit, guarantees or Liens, in each case supporting Debt otherwise included in the determination of such particular amount shall not be included;
(ii) any Liens granted pursuant to the equal and ratable provisions referred to in Section 4.07 shall not be treated as Debt;
(iii) accrual of interest, accrual of dividends, the accretion of accreted value, the obligation to pay commitment fees and the payment of interest in the form of additional preferred stock or Debt shall not be treated as Debt; and
(iv) the reclassification of preferred stock as Debt due to a change in accounting principles shall not be treated as Debt.
(f) In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Parent Guarantor, in its sole discretion, shall classify items of Debt and that no additional security shall only be required to include the amount and type of such Debt in one of such clauses and the Parent Guarantor shall be granted entitled to secure divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time.
(g) The amount of any Debt outstanding as of any date will be:
(i) in the case of any Debt issued with original issue discount, the amount of the liability in respect thereof determined in accordance with IFRS;
(ii) the principal amount of the Debt, in the case of any other Debt; and
(iii) in respect of Debt of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such Consolidated Funded Debtassets at the date of determination; and
(B) the amount of the Debt of the other Person.
Appears in 1 contract
Sources: Indenture (Ardagh Group S.A.)
Limitation on Debt. (a) The Parent and the Obligors shall Issuer will not, and shall will not permit any Restricted Subsidiary to permit there to be outstanding Debt except: to, Incur any Debt; provided, however, that (i) the Notes Issuer and all existing Consolidated Funded any Restricted Subsidiary of the Issuer other than Quintiles and any Subsidiary of Quintiles that is a Restricted Subsidiary may Incur Debt as of January 23and Acquired Debt if the Issuer's Fixed Charge Coverage Ratio for the most recently ended four fiscal quarters for which financial statements have been filed with the Commission or delivered to the Trustee (which, 1998 for periods prior to the quarter ended June 30, 2004, will include periods prior to the Issue Date) pursuant to Section 4.17 immediately preceding the date on which such Debt is Incurred would have been at least 2.00 to 1.00 and described on Schedule 10.4 hereof; (ii) Funded Quintiles and any Subsidiary of Quintiles that is a Restricted Subsidiary may Incur Debt of a Subsidiary or the Parent owed to either Obligor; and (iii) additional Debt, provided that the ratio of Consolidated Total Acquired Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 if Quintiles' Fixed Charge Coverage Ratio for the period from January 23most recently ended four fiscal quarters for which financial statements have been filed with the Commission or delivered to the Trustee (which, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 for periods prior to 1.00 for the period from April 1, 1998 through quarter ended June 30, 19982004, will include periods prior to the Issue Date) pursuant to Section 4.17 immediately preceding the date on which such Debt is incurred would have been at least 2.00 to 1.00, in each case, determined on a pro forma basis (Cincluding pro forma application of the net proceeds therefrom for such four-quarter period), as if the additional Debt (including Acquired Debt) 3.50 had been Incurred at the beginning of such four-quarter period, with any revolving credit facility being deemed to 1.00 for be utilized only to the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998extent of amounts outstanding thereunder.
(b) The Parent shall not permit its Subsidiaries Notwithstanding the immediately preceding paragraph, any or all of the following Debt (including collectively, "Permitted Debt") may be Incurred at any time and without compliance with the Obligors) to permit there to be outstanding Debt, other than (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that the sum of immediately preceding paragraph:
(1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be permitted to be incurred pursuant to paragraph (a) of this Section 10.4.
(c) The Parent and the Obligors may renew, extend, substitute, refinance or replace any Consolidated Funded Debt permitted pursuant to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii))a Credit Facility; provided that the aggregate principal amount of Consolidated Funded all such Debt resulting from such renewal, extension, substitution, refinancing or replacement under Credit Facilities shall not exceed the original greater of (x) $385.0 million
(1) which are accompanied by a corresponding permanent commitment reduction, in each case under clauses (i) and (ii) which are made with Net Available Cash from Asset Sales as required as a result of a sale of assets and (y) the product of 2.00 and the Consolidated EBITDA of the Restricted Subsidiaries for the most recently ended four fiscal quarters for which financial statements have been filed with the Commission or delivered to the Trustee pursuant to Section 4.17;
(2) the Notes (excluding any Additional Notes) and related Subsidiary Guarantees, if any, and any Notes and related Subsidiary Guarantees, if any, issued in exchange for the Notes (excluding any Additional Notes) and related Subsidiary Guarantees, if any, pursuant to the Registration Rights Agreement;
(3) Debt of the Issuer or any Restricted Subsidiary in respect of Capital Lease Obligations and Purchase Money Debt, provided that:
(i) the aggregate principal amount of such Consolidated Funded Debt secured thereby does not exceed the Fair Market Value (on the date of the Incurrence thereof) of the Property acquired, constructed or leased, and
(ii) the aggregate principal amount of all Debt Incurred and then outstanding pursuant to this Section 4.09(b)(3) and Permitted Refinancing of Debt Incurred and then outstanding pursuant to this Section 4.09(b)(3) does not exceed $75.0 million;
(4) Debt (i) of the Issuer owing to and held by any Restricted Subsidiary and (ii) of a Restricted Subsidiary owing to and held by the Issuer or any other Restricted Subsidiary; provided, however, that no additional security any subsequent issue or transfer of Capital Stock or other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Debt (except to the Issuer or a Restricted Subsidiary) shall be granted deemed, in each case, to secure constitute the Incurrence of such Consolidated Funded Debt.Debt by the issuer thereof not permitted by this Section 4.09(b)(4);
(5) Debt Incurred and outstanding on or prior to the date on which such Person was acquired by the Issuer or any Restricted Subsidiary or assumed by the Issuer or any Restricted Subsidiary at the time of acquisition of all or any portion of the assets (or any business or product line of another Person) (other than Debt Incurred in connection with or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Restricted Subsidiary or was acquired by the Issuer); provided, however, at the time of such acquisition and after giving effect thereto, the aggregate principal amount of all the Debt Incurred and then outstanding pursuant to this Section 4.09(b)(5) and Permitted Refinancing of Debt Incurred and then outstanding pursuant to this Section 4.09(b)(5) does not exceed $25.0 million;
Appears in 1 contract
Sources: Indenture (Pharma Services Intermediate Holding Corp)
Limitation on Debt. (a) The Parent and the Obligors Issuer shall not, and shall not permit any Restricted Subsidiary to permit there to be outstanding to, Incur any Debt except: (i) the Notes and all existing Consolidated Funded Debt as of January 23, 1998 and described on Schedule 10.4 hereof; (ii) Funded Debt of a Subsidiary or the Parent owed to either Obligor; and (iii) additional Debt, provided except that the ratio Issuer and any Restricted Subsidiary may Incur Debt if after giving pro forma effect to the Incurrence of Consolidated Total such Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 and the receipt and application of the proceeds thereof the Fixed Charge Coverage Ratio of the Issuer would have been 2.00 to 1.00 for or greater (“Ratio Debt”); provided that, the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇aggregate principal amount of Debt incurred by Restricted Subsidiaries that are not Subsidiary Guarantors pursuant to this Section 4.9(a) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998shall not exceed $100.0 million.
(b) The Parent shall not permit its Subsidiaries Notwithstanding Section 4.9(a), the following Debt may be Incurred (including collectively, the Obligors“Permitted Debt”):
(1) to permit there to be outstanding Debt, other than (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, the Issuer or any Restricted Subsidiary under one or more Debt Facilities in an aggregate principal amount Incurred under this clause (ii1) Debt owed at any one time outstanding not to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that exceed the sum of (i) $2,200.0 million, plus (ii) the greater of (x) $600.0 million and (y) the Borrowing Base, plus (iii) the greater of (x) $325.0 million and (y) 60.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries determined for the Reference Period most recently ended, plus (iv) an amount such that, after giving pro forma effect thereto, the First Lien Secured Net Leverage Ratio (treating all Debt Incurred under this clause (1) Total as secured by Liens on the assets of the Issuer, including all undrawn amounts under the Issuer’s revolving portion of any Debt Facility) of the Issuer and its Restricted Subsidiaries would not exceed the greater of (A) 3.75 to 1.00 and (B) the First Lien Secured Net Leverage Ratio of the Issuer immediately prior to giving effect to such transaction, plus, in the case of any refinancing of any Debt permitted under this clause (1) or any portion thereof, any increase in the amount of such Debt in connection with any refinancing expenses, accrued and unpaid interest, premiums and other costs and expenses incurred in connection therewith; provided, that, solely for the purpose of calculating the First Lien Secured Net Leverage Ratio under this clause (1), any outstanding Debt Incurred under this clause (1) that is unsecured or secured on a junior basis (in whole or in part) shall nevertheless be included in clause (1)(x) of all Subsidiaries plus the definition of “First Lien Secured Net Leverage Ratio”;
(2) Debt secured of the Issuer or any Restricted Subsidiary outstanding on the Issue Date and not otherwise referred to in clause (1) of this Section 4.9(b);
(3) Debt owed by Liens permitted under Section 10.6(j) will at no time exceed the Issuer to any Restricted Subsidiary or Debt owed by a Restricted Subsidiary to the Issuer or a Restricted Subsidiary; provided, however, that:
(A) 1.00 times any such Debt owing by the Issuer or a Subsidiary Guarantor to a Restricted Subsidiary that is not a Subsidiary Guarantor shall be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, and
(B) upon either the transfer or other Disposition by such Restricted Subsidiary or the Issuer of any Debt so permitted to a Person other than the Issuer or another Restricted Subsidiary or the issuance (other than directors’ qualifying shares), sale, lease, transfer or other Disposition of shares of Capital Stock (including by consolidation or merger) of such Restricted Subsidiary to a Person other than the Issuer or another Restricted Subsidiary such that it ceases to be a Restricted Subsidiary, the provisions of this clause (3) shall no longer be applicable to such Debt and such Debt shall be deemed to have been Incurred at the time of such transfer or other Disposition;
(4) Debt consisting of the Notes (other than any Additional Notes);
(5) the Subsidiary Guarantees and Guarantees by the Issuer or any Restricted Subsidiary of any Debt of the Issuer or a Restricted Subsidiary permitted to be Incurred under this Indenture;
(6) Debt of the Issuer or any of its Restricted Subsidiaries represented by Capitalized Lease Obligations or purchase money obligations Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Issuer or such Restricted Subsidiary, in an aggregate principal amount, including all Debt Incurred to refund or refinance any Debt Incurred pursuant to this clause (6), not to exceed, at any one time outstanding, the greater of (x) $200.0 million and (y) 35.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries determined for the Reference Period most recently ended determined at the time of Incurrence (it being understood that any Debt Incurred pursuant to this clause (6) shall cease to be deemed Incurred or outstanding for purposes of this clause (6) but shall be deemed Incurred as Ratio Debt from January 23and after the first date on which the Issuer or such Restricted Subsidiary could have Incurred such Debt as Ratio Debt without reliance on this clause (6));
(7) Debt of the Issuer or any Restricted Subsidiary consisting of or pursuant to (i) Permitted Interest Rate, 1998 through December 31Currency or Commodity Price Agreements and (ii) Cash Management Agreements entered into in the ordinary course of business;
(8) Permitted Acquisition Debt;
(9) Debt of Foreign Subsidiaries, 1998 including all Debt Incurred to refund or refinance any Debt Incurred pursuant to this clause (9), in an aggregate amount Incurred pursuant to this clause (9) at any one time outstanding not to exceed the greater of (x) $150.0 million and (y) 25.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries determined for the Reference Period most recently ended (it being understood that any Debt Incurred pursuant to this clause (9) shall cease to be deemed Incurred or outstanding for purposes of this clause (9) but shall be deemed Incurred as Ratio Debt from and after the first date on which such Foreign Subsidiary could have Incurred such Debt as Ratio Debt without reliance on this clause (9));
(10) Permitted Refinancing Debt which is exchanged for or the proceeds of which are used to refinance or refund, or any extension or renewal of Debt Incurred pursuant to Section 4.9(a) or pursuant to clause (2), (4), (5), (6), (8), (9), (16), (17), (21) of this Section 4.9(b) or this clause (10);
(11) Obligations arising from agreements by the Issuer or a Restricted Subsidiary to provide for indemnification, purchase price closing adjustments, deferred compensation, earn-outs or other similar obligations, in each case, Incurred in connection with any Investment or the acquisition or disposition of any business, assets or Subsidiaries;
(12) Debt Incurred by the Issuer or its Restricted Subsidiaries under performance, bid, surety, release, appeal and similar bonds and statutory obligations, Debt in respect of workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, self-insurance obligations, and completion Guarantees (not for borrowed money) provided in the ordinary course of business, pursuant to reimbursement or indemnification obligations, in each case incurred in the ordinary course of business, and reimbursement obligations in respect of any of the foregoing;
(13) Debt Incurred in the ordinary course of business in connection with the financing of insurance premiums;
(14) Debt of the Issuer or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business;
(15) Debt Incurred and applied to repay the Notes;
(16) Debt in respect of Promissory Notes issued to current or former officers, directors and employees (or their respective family members, estates or trusts or other entities for the benefit of any of the foregoing) of the Ultimate Parent, the Issuer or their Subsidiaries to purchase or redeem Capital Stock or options of the Ultimate Parent or the Issuer in an aggregate principal amount not to exceed $5.0 million at any time outstanding (it being understood that any Debt Incurred pursuant to this clause (16) shall cease to be deemed Incurred or outstanding for purposes of this clause (16) but shall be deemed Incurred as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary could have Incurred such Debt as Ratio Debt without reliance on this clause (16));
(17) Debt Incurred on behalf of, or representing guarantees of Debt Incurred by, joint ventures; provided that the aggregate principal amount of Debt Incurred or guaranteed pursuant to this clause (17) does not exceed the greater of (x) $210.0 million and (y) 40.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries determined for the Reference Period most recently ended (it being understood that any Debt Incurred pursuant to this clause (17) shall cease to be deemed Incurred or outstanding for purposes of this clause (17) but shall be deemed Incurred as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary could have Incurred such Debt as Ratio Debt without reliance on this clause (17));
(18) Debt of a joint venture to the Issuer or a Restricted Subsidiary and to the other holders of Capital Stock of, or participants in, such joint venture, so long as the percentage of the aggregate amount of such Debt of such joint venture owed to such holders of its Capital Stock or participants of such joint venture does not exceed the percentage of the aggregate outstanding amount of the Capital Stock of such joint venture held by such holders or such participant’s participation in such joint venture;
(19) Debt in respect of letters of credit, bank Guarantees or similar instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Debt) in the ordinary course of business and consistent with past practice or industry practices;
(20) Debt of the Issuer or any Restricted Subsidiary in an amount such that, after giving pro forma effect thereto, the Total Net Leverage Ratio of the Issuer and its Restricted Subsidiaries would not exceed the greater of (A) 5.25 to 1.00 and (B) .50 times the Total Net Leverage Ratio of the Issuer immediately prior to giving effect to such transaction; and
(21) in addition to the items referred to in clauses (1) through (20) above, Debt of the Issuer or any Restricted Subsidiary which, together with any other outstanding Debt Incurred pursuant to this clause (21), and including any renewals, extensions, substitutions, refinancings or replacements of such Debt, has an aggregate principal amount at any one time outstanding, not to exceed the greater of (x) $300.0 million and (y) 45.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries determined for the Reference Period most recently ended determined at the time of Incurrence (it being understood that any Debt Incurred pursuant to this clause (21) shall be deemed Incurred or outstanding for purposes of this clause (21) but shall be deemed Incurred as Ratio Debt from and after December 31, 1998; provided that the first date on which the Issuer or such Restricted Subsidiary could have Incurred such Debt must also be permitted to be incurred pursuant to paragraph as Ratio Debt without reliance on this clause (a) of this Section 10.421)).
(c) The Parent For purposes of determining compliance with, and the Obligors outstanding principal amount of any particular Debt Incurred pursuant to, and in compliance with, this Section 4.9:
(1) in the event that Debt meets the criteria of more than one of the types of Debt described in Section 4.9(a) and Section 4.9(b), the Issuer, in its sole discretion, may renewclassify such item of Debt on the date of Incurrence (or later classify or reclassify such Debt, extend, substitute, refinance in its sole discretion) in any manner permitted by Section 4.9 and shall only be required to include the amount and type of such Debt in one of such clauses; provided that all Debt outstanding on or replace any Consolidated Funded Debt permitted pursuant prior to paragraphs the Acquisition Closing Date (a) under the Term Loan Credit Agreement shall be deemed Incurred under subclause (i) of Section 4.9(b)(1) and may not later be reclassified and (b) above under the ABL Credit Agreement shall be deemed Incurred under subclause (except (a)(iiii) of Section 4.9(b)(1) and may not be later reclassified;
(b)(ii)); provided that 2) Guarantees of, or obligations in respect of letters of credit relating to, Debt which is otherwise included in the determination of a particular amount of Debt shall not be included;
(3) the principal amount of Consolidated Funded any Redeemable Stock or Preferred Stock of the Issuer or a Restricted Subsidiary will be equal to the greater of the maximum redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(4) Debt resulting from permitted by this Section 4.9 need not be permitted solely by reference to one provision permitting such renewalDebt but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.9 permitting such Debt;
(5) any Receivables Sale shall be the amount for which there is recourse to the seller;
(6) the amount of Debt issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP; and
(7) Debt, extensionthe proceeds of which are funded into an escrow account or trust or similar arrangement pending the satisfaction of one or more conditions, substitutionunless and until such proceeds are released to the Issuer or any Restricted Subsidiary will not constitute Debt.
(d) Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Debt and the payment of dividends in the form of additional shares of Preferred Stock or Redeemable Stock will not be deemed to be an Incurrence of Debt for purposes of this Section 4.9.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Debt was Incurred, in the case of term Debt, or first committed, in the case of revolving credit Debt; provided that if such Debt is Incurred to refinance other Debt denominated in a foreign currency, and such refinancing or replacement would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not exceed to have been exceeded so long as the original principal amount of such Consolidated Funded refinancing Debt does not exceed the principal amount of such Debt being refinanced (plus unpaid accrued interest and the aggregate amount of premiums (including reasonable tender premiums) and underwriting discounts, defeasance costs and fees, discounts and expenses in connection therewith). Notwithstanding any other provision of this Section 4.9, the maximum amount of Debt that no additional security the Issuer may Incur pursuant to this Section 4.9 shall not be granted deemed to secure such Consolidated Funded Debtbe exceeded solely as a result of fluctuations in the exchange rate of currencies.
Appears in 1 contract
Sources: Indenture (Vertiv Holdings Co)
Limitation on Debt. (a) The Parent and the Obligors Company shall not, and ------------------ shall not permit any Subsidiary of its Restricted Subsidiaries to, issue, directly or indirectly, any Debt unless, after giving effect to permit there the issuance of such Debt and the receipt and application of the proceeds therefrom, the Consolidated EBITDA Coverage Ratio exceeds the ratio indicated below for Debt issued in each period indicated. Period Ratio ------ ----- February 14, 1997 through December 31, 1998 1.90 January 1, 1999 through December 31, 1999 2.38 January 1, 2000 through December 31, 2000 2.61 on and after January 1, 2001 2.85 If the Company or any of its Restricted Subsidiaries proposes to be outstanding issue Debt except: (i) pursuant to this Section 4.2(a), it shall furnish to the Holders of the Notes and all existing Consolidated Funded Debt as at least five days prior to such issuance a calculation in reasonable detail, certified by the chief financial officer, treasurer or controller of January 23the Company, 1998 and described on Schedule 10.4 hereof; (ii) Funded Debt of a Subsidiary or the Parent owed to either Obligor; and (iii) additional Debt, provided that the ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998demonstrating compliance with this Section 4.2(a).
(b) The Parent shall not permit Notwithstanding Section 4.2(a), but subject to Section 4.2(c), the Company and any of its Restricted Subsidiaries (including may issue the Obligors) to permit there to be outstanding following Debt, other than :
(i) Consolidated Funded Debt issued pursuant to the Credit Agreement, Debt under the Interest Rate Agreements required under Section 7.12 of Subsidiaries the Credit Agreement, Debt evidenced by the Notes, the Contingent Payment Notes and the Contingent Payment Bonuses (as defined in the Main Transaction Agreement) and Debt outstanding as of January 23, 1998 and described on Schedule 10.4 hereof, the Closing Date;
(ii) Debt owed issued in exchange for, or the net proceeds of which are used to refund or refinance, any Debt permitted by this Section 4.2 (and any refunding or refinancings thereof); provided that (A) the principal -------- amount of such new Debt (or, if
(1) shall not mature prior to the Parent Stated Maturity of the Debt so exchanged, refunded or either Obligorrefinanced (for purposes of this section, prepayment offers required by, and made in accordance with, the terms and conditions of the agreement governing such new Debt upon the occurrence of any "change of control" (iiias defined in the agreement governing such new Debt) Permitted Subsidiary Guarantiesshall not be deemed to effect the Stated Maturity of such new Debt), and (2) shall have an Average Life equal to or greater than the remaining Average Life of the Debt so exchanged, refunded or refinanced; (ivC) unless such new Debt is Senior Debt, such new Debt shall not expressly prohibit mandatory payments of the NotesNotes or distributions from any Subsidiary of the Company to the Company to permit the Company to make such payments, absent an event of default under the agreement governing such new Debt; and (vD) additional any Debt provided that issued under this subsection in exchange for, or the sum net proceeds of (1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23which are used to refund or refinance, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such any Non-Recourse Debt must also be permitted Non-Recourse Debt; provided, however, -------- ------- that the foregoing proviso shall not apply to Debt issued to refund, refinance or replace all Notes then outstanding;
(iii) Debt owed to and held by a Wholly Owned Subsidiary of the Company, or Debt owed to and held by the Company or any of its Wholly Owned Subsidiaries; provided that any subsequent issuance or transfer of any -------- Capital Stock that results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary of the Company or any subsequent transfer of such Debt (other than to the Company or a Wholly Owned Subsidiary of the Company) shall be deemed, in each case, to constitute the issuance of such Debt by the Company;
(iv) Debt (A) incurred in respect of performance, surety or appeal bonds provided in the ordnary course of business, (B) incurred under Hedging Obligations, provided that such agreements do not increase the Debt of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder, and (C) arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary of the Company pursuant to paragraph such agreements, in any case issued in connection with the disposition of any business, assets or Restricted Subsidiary of the Company (aother than guarantees of Debt issued by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary of the Company for the purpose of financing such acquisition);
(v) Debt in respect of letters of credit and bankers' acceptances incurred in the ordinary course of business;
(vi) Acquired Debt;
(vii) Debt issued to finance, directly or indirectly, capital expenditures of the Company and its Restricted Subsidiaries in an aggregate principal amount, with respect to each fiscal year, not to exceed the amount set forth below with respect to such fiscal year (with each such period being adjusted to correspond to the Borrower's actual fiscal year): Amount Period ------ ------ $ 500,000 From the Closing Date to March 31, 1997 $3,000,000 FYE March 31, 1998 $3,500,000 FYE March 31, 1999 $4,000,000 FYE March 31, 2000 $4,250,000 FYE March 31, 2001 $4,500,000 FYE March 31, 2002 $5,000,000 FYE March 31, 2003 $5,500,000 FYE March 31, 2004; provided that the amount of Debt which may be issued in any fiscal year of -------- the Company pursuant to this clause (vii) shall be increased by the amount of Debt (other than refinancing Debt) which could have been issued in the prior fiscal year (including by reason of this proviso) of the Company pursuant to this clause (vii) but which was not so issued;
(viii) Debt represented by the obligations of the Company or any of its Restricted Subsidiaries to repurchase shares, or cancel or repurchase options to purchase shares, of the Company's capital stock held by employees of the Company or any of its Restricted Subsidiaries as set forth in the agreements under which such employees purchase or hold shares of the Company's capital stock (as such agreements may be amended), including, without limitation, the Stockholders Agreement;
(ix) Non-Recourse Debt in an aggregate principal amount not in excess of $5,000,000; and
(x) In addition to the Debt permitted by clauses (i) through (ix) of this Section 10.44.2(b) and by Section 4.2(a) above, Debt in an aggregate outstanding principal amount which is not at any time in excess of $5,000,000. For purposes of clause (ii), Debt may be incurred in exchange for, or to refund or refinance, operating leases in existence on the date hereof, notwithstanding the fact that such operating leases do not constitute "Debt", so long as the incurrence of such Debt would have been permitted under such clause (ii) had the operating lease in question been a Capital Lease.
(c) The Parent Notwithstanding the provisions of Section 4.2(b) above, the Company and the Obligors may renew, extend, substitute, refinance or replace its Restricted Subsidiaries shall not issue any Consolidated Funded Debt permitted pursuant to paragraphs Section 4.2(b)(ii) above (aA) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Obligations, unless the provisions of such Debt contain subordination provisions which, in the aggregate, subordinate such Debt to the Notes in substantially the same manner as such Subordinated Obligations were subordinated to the Notes (or in a manner which is more subordinated than such Subordinated Obligations) or (B) if such Debt is subordinate or junior in any respect to any Senior Debt, unless such Debt either specifically provides that such Debt is to rank Pari Passu with the Notes or is expressly subordinated in ---- ----- right of payment to the Notes (provided that, with respect to the provisions of -------- this clause (B), no effect shall be given to any distinctions between different categories of unsubordinated Debt which might otherwise exist by reason of (x) any liens or other encumbrances arising or created in respect of some but not all unsubordinated Debt, (y) intercreditor agreements between holders of different classes of unsubordinated Debt or (c) different maturities or prepayment provisions on any such unsubordinated Debt). Notwithstanding anything to the contrary set forth in this Section 4.2, the maximum amount of Debt that the Company or any Restricted Subsidiary may issue pursuant to this Section 4.2 shall not be deemed to be exceeded due solely to fluctuations in the exchange rates of currencies. In addition, neither the Company nor any Restricted Subsidiary shall issue any Secured Debt (other than Debt incurred pursuant to clauses (i), (ii), (iv), (v), (vi), (vii) and (bix) above (except (a)(iiof Section 4.2(b) above) which is not Senior Debt, unless contemporaneously therewith effective provision is made to secure the Notes equally and (b)(ii)); provided that ratably with such Secured Debt, to the reasonable satisfaction of Holders of the Notes holding at least a majority of the outstanding principal amount of the Notes, for so long as such Secured Debt is secured by a Lien. All references in this Section 4.2 to the principal amount of Consolidated Funded any Debt resulting from such renewalshall be deemed, extensionwith respect to any Debt which is Preferred Stock, substitution, refinancing or replacement shall not exceed to refer to the original principal amount liquidation value of such Consolidated Funded Debt and that no additional security shall be granted to secure such Consolidated Funded DebtPreferred Stock.
Appears in 1 contract
Sources: Subordinated Note Agreement (HCC Industries International)
Limitation on Debt. The Holding Company will not, and will not permit ------------------ any of its Subsidiaries to, be liable or create, assume, incur, guarantee, or in any manner become liable, contingently or otherwise, in respect of any Debt other than:
(a) The Parent Debt evidenced by the Notes;
(b) Debt outstanding on the date hereof and referred to in Exhibit 5.9 ----------- attached hereto;
(c) Debt in addition to that permitted under section 14.5(a) and (b), including, without limitation, any Debt incurred under the Fleet Agreement, provided that, both at the time of and immediately after giving effect to -------- the incurrence thereof and the Obligors shall not, and shall not permit repayment of any Subsidiary to permit there to be outstanding Debt except: that is concurrently repaid:
(i) the Notes ratio of Consolidated Debt on such date to Pro Forma Consolidated Cash Flow for the period of four consecutive fiscal quarters ended on or most recently prior to such date does not exceed the applicable ratio set forth below for the period in which such incurrence shall occur: Period Ratio ------ ----- Closing Date through August 31, 2001 4.75 to 1.00 September 1, 2001 through August 31, 2002 4.50 to 1.00 From and all existing Consolidated Funded Debt as of January 23after September 1, 1998 and described on Schedule 10.4 hereof; 2002 4.25 to 1.00;
(ii) Funded the ratio of Consolidated Senior Debt on such date to Pro Forma Consolidated Cash Flow for the period of a Subsidiary four consecutive fiscal quarters ended on or most recently prior to such date does not exceed the Parent owed applicable ratio set forth below for the period in which such incurrence shall occur: Period Ratio ------ ----- Closing Date through August 31, 2001 4.00 to either Obligor1.00 September 1, 2001 through August 31, 2002 3.75 to 1.00 From and after September 1, 2002 3.50 to 1.00; and
(iii) in the case of any Debt other than Debt incurred under the Fleet Agreement, no Default or Event of Default shall exist; and
(d) Debt incurred for the extension, refinancing, refunding or renewal of any Debt permitted under sections 14.5(a), (b) or (c), provided that (i) -------- - the aggregate principal amount of such replacement Debt does not exceed at any time that of the Debt then being extended, refinanced, refunded or renewed, (ii) the terms of such replacement Debt are not in any material -- respect more restrictive upon the Holding Company or any of its Subsidiaries than those of the Debt then being extended, refinanced, refunded or renewed and (iii) additional Debtboth at the time of such extension, provided that the ratio --- refinancing, refunding or renewal and immediately after giving effect thereto, no Default or Event of Consolidated Total Debt to Consolidated EBITDA Default shall at no time exceed (A) 4.25 to 1.00 for the period from January 23, 1998 through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C) 3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D) 3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including the Obligors) to permit there to be outstanding Debt, other than (i) Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii) Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt provided that the sum of (1) Total Debt outstanding of all Subsidiaries plus (2) Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A) 1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that such Debt must also be permitted to be incurred pursuant to paragraph (a) exist. For purposes of this Section 10.4.
(c) The Parent section 14.5, any Person becoming a Subsidiary of the Holding Company after the date hereof shall be deemed, at the time it becomes a Subsidiary, to have incurred all of its then outstanding Indebtedness, and any Person extending, refinancing, refunding or renewing any Indebtedness shall be deemed to have incurred such Indebtedness at the Obligors may renew, extend, substitute, refinance or replace any Consolidated Funded Debt permitted pursuant to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii)); provided that the principal amount time of Consolidated Funded Debt resulting from such renewal, extension, substitutionrefinancing, refinancing refunding or replacement shall not exceed the original principal amount of such Consolidated Funded Debt and that no additional security shall be granted to secure such Consolidated Funded Debtrenewal.
Appears in 1 contract